Correlation
coefficient formula = Covariance between Stock A and market / Standard
deviation of stock * standard deviation of market
Covariance
between stock and market = 0.0026
Standard
deviation of stock A = square root of variance = square root of (0.005) =
0.07071
Standard
deviation of market = square root of (0.008) = 0.08944
Correlation
coefficient = 0.0026 / (0.07071 * 0.08944) = 0.4111
Answer is
0.4111
