Which one of the following statements is false?

Companies, which are not sensitive to the economic cycles, are referred to as defensive companies.


The Fama French 3-factor model expands on the capital asset pricing model by adding size risk and value risk factors to the market risk factors.


If the correlation between two stocks is -1.0, it means that the prices of the two stocks move completely in tandem to their average prices.


If the correlation between two stocks is +1.0, it means that the prices of the two stocks move completely in tandem to their average prices.


Hedging balance out the positive stock in your portfolio helps to manage risks.

1 answer

The false statement is: "If the correlation between two stocks is -1.0, it means that the prices of the two stocks move completely in tandem to their average prices."