Correlation Between Truist Financial and State Street

Can any of the company-specific risk be diversified away by investing in both Truist Financial and State Street at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Truist Financial and State Street into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Truist Financial Corp and State Street Corp, you can compare the effects of market volatilities on Truist Financial and State Street and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Truist Financial with a short position of State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Truist Financial and State Street.

Diversification Opportunities for Truist Financial and State Street

0.93

Correlation Coefficient

Truist Financial  State Street

Almost no diversification

The 3 months correlation between Truist and State is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Truist Financial Corp and State Street Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Corp and Truist Financial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Truist Financial Corp are associated (or correlated) with State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Corp has no effect on the direction of Truist Financial i.e., Truist Financial and State Street go up and down completely randomly.

Pair Corralation between Truist Financial and State Street

Considering the 90-day investment horizon Truist Financial is expected to generate 1.01 times less return on investment than State Street. But when comparing it to its historical volatility, Truist Financial Corp is 1.02 times less risky than State Street. It trades about 0.12 of its potential returns per unit of risk. State Street Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  11,614  in State Street Corp on October 6, 2025 and sell it today you would earn a total of  1,293  from holding State Street Corp or generate 11.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Truist Financial Corp  vs.  State Street Corp

Truist Financial Corp

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Truist Financial Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Truist Financial may actually be approaching a critical reversion point that can send shares even higher in February 2026.

State Street Corp

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in State Street Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, State Street may actually be approaching a critical reversion point that can send shares even higher in February 2026.

Pair Trading with Truist Financial and State Street

The main advantage of trading using opposite Truist Financial and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Truist Financial position performs unexpectedly, State Street can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in State Street will offset losses from the drop in State Street's long position.

The idea behind Truist Financial Corp and State Street Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.