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If the covariance between oil and gasoline prices is $2.2$ and the standard deviation of gas price is $0.35$ while the standard deviation of oil price is $10.1$, what is the correlation between oil and gas prices?

We are just now learning about this stuff in our statistics class but I wanted to know if I was solving this question correctly. For this question I took the covariance of $2.2$ and divided it by $(.35)(10.1)$ to get my answer.

$\dfrac{2.2}{(0.35)(10.1)} = 0.6223479491$

which I would then round to $3$ decimal places to get my final answer which is then $=0.622$

Is this the correct way to do this?

2 Answers 2

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Correlation is covariance divided by standard deviations. So what you are doing seems correct. More on wiki about correlation.

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    Thank you I just wanted to make sure because the notes we were given we not exactly clear on that – 2017-01-25
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The answer to this problem is .622 as stated above as the above method of solving the problem is correct and thus so is the answer