a) Any correlated group will do, the stocks don't necessarily have to be in the same industry. However you're apt to find stocks in the same industry being more highly correlated. Yes, VSS 4.0 allows you to see correlations.
b) I like to see 0.80 or above as the cutoff for high correlations. However anything above 0.70 can work (but I only use this value if I can't find enough 0.80 or better correlations).
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