Question

How do I know if a stock is correlated to the market?

How do I know if a stock is correlated to the market?

Homework Answers

Answer #1

To understand the correlation of the stock of the market we need to see the movement of the stock and the market.

If the stock and market moves together in the same direction at the same time then stock and market are positively correlated

If the stock and market move in opposite direction at the same time then the stock and market are negatively correlated.

If the movement of market and stock are niether moving toegther or in opposite direction then they are not correlated.

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