36 Two Stock Portfolio Part 2

This video demonstrates how to calculate portfolio return and risk when given correlation coefficients instead of covariances. We explore the relationship between correlation and covariance and how to substitute one for the other in portfolio variance calculations. Learn how the correlation coefficient, ranging from -1 to 1, provides insights into the strength and direction of the relationship between asset returns. Follow along with a step-by-step example to see how to plug in the numbers and derive the portfolio's standard deviation. Visit AxiomTutoring.com and subscribe to @AxiomTutoringCourses for more financial tutorials.