The variance of returns of Asset A is 625. The variance of returns of Asset B is 1,225. The covariance of returns between Asset A and Asset B is 600. The correlation of returns between Asset A and Asset B is closest to:

The correlation of returns between Asset A and Asset B is closest to 0.685714

or 68.57%

Explanation:

The formula to find the correlation of an asset is

Correlation of AB = Co variance AB/Standard deviation A * Standard deviation B

Co variance AB = 600

Standard deviation of A = (625) ^0.5=25

Standard deviation of B = (1,225) ^0.5=35

Put these values in the formula

600 / (25*35) = 0.685714