Imagine a world where there are 10 stocks and which are exact replica of each other
Expected return of each stock I.e E(Ri)= 20%
SD of each stock = to 12%
pairwise correlation = rij = 0.3
but in n stock world we have learnt that two stocks are corelated to each other only due to market, does rij represents that co relation?
Question is not clear.
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