A full quantum treatment about the process of parametric down-conversion with frequency degenerate but polarization non-degenerate in an optical parametric oscillator (OPO) cavity is presented. Using the linearized Langevin equations and spectral matrix, we calculated the squeezing spectra of the coupled mode in the output field. The squeezing as a function of driving field and detection frequency is obtained. The results obtained, which are compared with those found semiclassically by Reynaud et al., indicate that it is possible to generate a two-mode coherent squeezed state with large amplitude. The quantum correlation between the signal and the idler modes is also discussed. It is shown that there is an inseparable relationship between the two-mode squeezing and the intermode quantum correlation.