There like one case where we can average or weighted standard deviations to get the total standard deviation instead of using the squared weights squared standard deviation plus 2 time correlation blah blah formula… Where is it? Is that for active managers maybe?
think you’re referring to total standard deviation of a portfolio on adding a foreign stock?
Standard deviation for 2 corner portfolios
For portfolios on the efficient frontier, you don’t need correlation coefficient
Again though, both of those use the formula without the correlation part of it, but none the less its squared weights…just the other day i did a problem that said you basically take the average of the standard deviations, just like you would do returns, but i cant for the life of me figure out what it was…
Buddy – when you add a foreign stock to the portfolio – then the correlation coeffecient and weights come into play
stevenevans Wrote: ------------------------------------------------------- > Buddy – when you add a foreign stock to the > portfolio – then the correlation coeffecient and > weights come into play Agreed- there are no weights because the market risk and the currency risk come into play for the entire amount.