Risk and correlation coefficient
Hello!
I have a question about risk, I would be happy if you help me!
The professor today said that non-diversifiable part of the risk is equal to the correlation coefficient times the risk of the stock -> sigma n-div=(correlation coefficient)(sigma stock). She also said that the risk in the portfolio of that stock is equal to the non-diversifiable risk of that stock -> sigma stock=sigma n-div
Does this mean that the correlation coefficient equals 1? She said that it's not the case, but I don't understand why. Can you help me?
Thank you all! :)
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