Correlation Between State Street and Hartford Financial
Can any of the company-specific risk be diversified away by investing in both State Street and Hartford Financial 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 State Street and Hartford Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Street Corp and Hartford Financial Services, you can compare the effects of market volatilities on State Street and Hartford Financial 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 State Street with a short position of Hartford Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and Hartford Financial.
Diversification Opportunities for State Street and Hartford Financial
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between State and Hartford is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding State Street Corp and Hartford Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Financial and State Street 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 State Street Corp are associated (or correlated) with Hartford Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Financial has no effect on the direction of State Street i.e., State Street and Hartford Financial go up and down completely randomly.
Pair Corralation between State Street and Hartford Financial
Considering the 90-day investment horizon State Street Corp is expected to generate 1.31 times more return on investment than Hartford Financial. However, State Street is 1.31 times more volatile than Hartford Financial Services. It trades about 0.07 of its potential returns per unit of risk. Hartford Financial Services is currently generating about 0.01 per unit of risk. If you would invest 11,278 in State Street Corp on August 14, 2025 and sell it today you would earn a total of 665.00 from holding State Street Corp or generate 5.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Street Corp vs. Hartford Financial Services
Performance |
| Timeline |
| State Street Corp |
| Hartford Financial |
State Street and Hartford Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Street and Hartford Financial
The main advantage of trading using opposite State Street and Hartford Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street position performs unexpectedly, Hartford Financial 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 Hartford Financial will offset losses from the drop in Hartford Financial's long position.| State Street vs. Northern Trust | State Street vs. Franklin Resources | State Street vs. Invesco Plc | State Street vs. T Rowe Price |
| Hartford Financial vs. Axa SA ADR | Hartford Financial vs. Goosehead Insurance | Hartford Financial vs. International General Insurance | Hartford Financial vs. Arch Capital Group |
Check out your portfolio center.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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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