Explain covariance and correlation and standard deviation

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Explain Covariance, correlation and standard deviation - theory.

This module is focused on two important aspects of portfolio construction - the control of variance within a portfolio of assets and the maximization of return.

Describe what the portfolio variance calculations are meant to tell you as if you were asked to explain the concept to someone with a very limited mathematical or finance background. In particular, try to explain why the calculation of variance isn\\\'t just a matter of getting the average of all the individual variances.

Reference no: EM1316586

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