Why is it so difficult in the real world to find companies with negative correlation coefficients?© BrainMass Inc. brainmass.com November 24, 2022, 11:53 am ad1c9bdddf
The sign of the correlation coefficient shows whether the two stock prices are positively or negatively correlated. Positively correlated stock prices move in the same directions, and have a correlation coefficient that greater than zero, but not greater than +1. Negatively correlated stock prices move in opposite directions, and have a correlation coefficient that less than zero, but not less than -1.
The correlation coefficient's numerical value shows the strength of the correlation between the two ...
The solution explains how stock prices are positively or negatively correlated and uses correlated stock prices in different market conditions.