Answer: 0.22

The correlation coefficient is calculated using the formula: ρ(X,Y) = Cov(X,Y) / (σ(X) * σ(Y)) Where: - Cov(X,Y) = 120 (from the covariance matrix) - σ(X) = √650 = 25.50 (standard deviation of X, which is the square root of variance of X) - σ(Y) = √450 = 21.21 (standard deviation of Y, which is the square root of variance of Y) Calculation: ρ(X,Y) = 120 / (25.50 * 21.21) = 120 / 540.855 = 0.2218 ≈ 0.22 Therefore, the correlation between stocks X and Y is 0.22.

Author: Nikitesh Somanthe