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Suppose the annual returns for North Airline are 12%, 20%, 5%, -5%, -2%, 7% and for...

Suppose the annual returns for North Airline are 12%, 20%, 5%, -5%, -2%, 7% and for South Airline are 8%, -5%, -2%, 7%, 5%, 24%. The volatility of returns for South Airline is? The Standard Deviation of returns for North Airline is?The Covariance of returns between North & South Airlines is?The Correlation Coefficient of returns between North & South Airlines is?The mean return for North Airline is?

Math   Statistics-And-Probability   
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Answer #1

n= 6.0000
X̅=ΣX/n 6.1667
Y̅=ΣY/n 6.1667
sx=(√(Σx2-(Σx)2/n)/(n-1))= 9.1524
sy=(√(Σy2-(Σy)2/n)/(n-1))= 10.1472
Cov=sxy=(ΣXY-(ΣXΣY)/n)/(n-1)= -23.8333
r=Cov/(Sx*Sy)= -0.2566

from above:

Standard Deviation of returns for South Airline is =9.1524

Standard Deviation of returns for North Airline is =10.1472

Covariance of returns between North & South Airlines is = -23.8333

Correlation Coefficient of returns between North & South Airlines is =-0.2566

The mean return for North Airline is =6.1667

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