Statistics for investing (3.2) Joe's retirement plan invests in stocks through an "index fund" that follows the behavior of the stock market as a whole, as measured by the Standard & Poor's (S&P) 500 stock index. Joe wants to buy a mutual fund that does not track the index closely. He reads that monthly returns from Fidelity Technology Fund have correlation with the index and that Fidelity Real Estate Fund has correlation role="math" localid="1649424494964" with the index.
(a) Which of these funds has the closer relationship to returns from the stock market as a whole? How do you know?
(b) Does the information given tell Joe anything about which fund has had higher returns?