What does a correlation of 0.5 mean?

What does a correlation of 0.5 mean?

Correlation coefficients whose magnitude are between 0.5 and 0.7 indicate variables which can be considered moderately correlated. Correlation coefficients whose magnitude are between 0.3 and 0.5 indicate variables which have a low correlation.

How do you calculate portfolio risk?

To calculate the risk of a two-stock portfolio, first take the square of the weight of asset A and multiply it by square of standard deviation of asset A. Repeat the calculation for asset B.