Correlation Between Kratos Defense and Defensive Market
Can any of the company-specific risk be diversified away by investing in both Kratos Defense and Defensive Market 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 Kratos Defense and Defensive Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kratos Defense Security and Defensive Market Strategies, you can compare the effects of market volatilities on Kratos Defense and Defensive Market 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 Kratos Defense with a short position of Defensive Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kratos Defense and Defensive Market.
Diversification Opportunities for Kratos Defense and Defensive Market
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kratos and Defensive is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Kratos Defense Security and Defensive Market Strategies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Defensive Market Str and Kratos Defense 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 Kratos Defense Security are associated (or correlated) with Defensive Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Defensive Market Str has no effect on the direction of Kratos Defense i.e., Kratos Defense and Defensive Market go up and down completely randomly.
Pair Corralation between Kratos Defense and Defensive Market
Given the investment horizon of 90 days Kratos Defense Security is expected to generate 20.42 times more return on investment than Defensive Market. However, Kratos Defense is 20.42 times more volatile than Defensive Market Strategies. It trades about 0.3 of its potential returns per unit of risk. Defensive Market Strategies is currently generating about 0.52 per unit of risk. If you would invest 4,323 in Kratos Defense Security on April 18, 2025 and sell it today you would earn a total of 1,568 from holding Kratos Defense Security or generate 36.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kratos Defense Security vs. Defensive Market Strategies
Performance |
| Timeline |
| Kratos Defense Security |
| Defensive Market Str |
Kratos Defense and Defensive Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kratos Defense and Defensive Market
The main advantage of trading using opposite Kratos Defense and Defensive Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kratos Defense position performs unexpectedly, Defensive Market 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 Defensive Market will offset losses from the drop in Defensive Market's long position.| Kratos Defense vs. L3Harris Technologies | Kratos Defense vs. AeroVironment | Kratos Defense vs. Mercury Systems | Kratos Defense vs. Textron |
| Defensive Market vs. Siit Large Cap | Defensive Market vs. Profunds Large Cap Growth | Defensive Market vs. Upright Assets Allocation | Defensive Market vs. Alternative Asset Allocation |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |