Describe why correlation may be considered a better measure of diversification than covariance.
Question
Solution 1
Correlation is often considered a better measure of diversification than covariance for several reasons:
- Standardization: Correlation is a standardized measure, meaning it always ranges between -1 and 1. This makes it easier to interpret and compare across different pairs of variables. Covarianc Knowee AI is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI is a powerful AI-powered study tool designed to help you to solve study problem.
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