Question

Consider these historical annual returns for the MDY, mid-cap ETF and DHI, a mid-cap homebuilding company. Date Return MDY DHI 12/31/106.120% -2.040% 12/31/11 26.300% 23.040% 12/31/12 9.810% 16.848% 12/31/13 14.830% 7.864% 12/31/14 -2.430% 3.944% 12/31/15 -2.670% -7.136% 12/31/16 -38.250% -32.600% 12/31/17 12.500% 13.000% 12/31/18 32.650% 26.120% 6.540% 5.449% 20.490% 18.007% Avg Stdev What is closest to the correlation coef. between these two? (Hint: Use Excel's "correl" function). OD) 96% A) -11% E) 75% o C) 100% OB) 0%

Answer 1

C63 - X V fx =CORREL(B53:B61,C53:C61) | А В 52 Year MDY 53 2010 6.12% 54 2011 26.30% 55 2012 9.81% 56 2013 14.83% 57 2014 -2.43% 58 2015 -2.67% 59 2016 -38.25% 60 2017 12.50% 61 2018 32.65% 62 63 Correlation DHI -2.040% 23.040% 16.848% 7.864% 3.944% -7.136% -32.600% 13.000% 26.120% 96%.

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