Answer
Investing in First Energy and General Electric would be a smart option as they share a very low correlation coefficient.
The correlation coefficient quantifies the linear association between two variables. In this case, the investment will only be in those stocks thatshare a tiny association. Thus, one should choose First Energy and General electric.
The following steps need to be followed to find out the correlation coefficient:
Step 1: Enter the data in Minitab.
Step 2: Select the data and go on Stat→Basic→Correlation Coefficient. Select both the variables and press OK.
Section2
First Energy and Cisco share the largest negative correlation coefficient.
Cisco and First energy share an association of – 0.248. Thus, they share a negative relationship or association. As one variable rises or falls, the other one will fall and rise, respectively.
Work Step by Step
Given above.
