Suppose you observe the following return standard deviations

Suppose you observe the following return standard deviations of stock A and B, and their return covariance as:

Therefore, the correlation between the returns on stock A and B is _______ .

Solution

Correlation= Coveriance(A,B)/S.D(A)S.D(B)
= 0.0416/(0.2)(0.32)
= 0.65
Thanks