Given the following returns for Stock X and stock Y
Stock X % return 

Stock Y % return 
2 

1 
4 

3 
6 

5 
8 

6 
12 

9 
 Calculate the variance, and standard deviation of each stock return, assume the above is a sample (i.e. divide by n1 instead of n). Interpret the results for x only.
 Calculate the covariance, and correlation coefficient between both stocks
 Assume a portfolio made of both stocks (60% in stock X and 40% in stock Y) calculate the expected return and standard deviation of the portfolio.
Solution:
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