Correlation Between Kratos Defense and Sprott Physical
Can any of the company-specific risk be diversified away by investing in both Kratos Defense and Sprott Physical 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 Sprott Physical 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 Sprott Physical Gold, you can compare the effects of market volatilities on Kratos Defense and Sprott Physical 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 Sprott Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kratos Defense and Sprott Physical.
Diversification Opportunities for Kratos Defense and Sprott Physical
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kratos and Sprott is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Kratos Defense Security and Sprott Physical Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Physical Gold 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 Sprott Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Physical Gold has no effect on the direction of Kratos Defense i.e., Kratos Defense and Sprott Physical go up and down completely randomly.
Pair Corralation between Kratos Defense and Sprott Physical
Given the investment horizon of 90 days Kratos Defense Security is expected to generate 4.57 times more return on investment than Sprott Physical. However, Kratos Defense is 4.57 times more volatile than Sprott Physical Gold. It trades about 0.27 of its potential returns per unit of risk. Sprott Physical Gold is currently generating about 0.12 per unit of risk. If you would invest 4,466 in Kratos Defense Security on June 3, 2025 and sell it today you would earn a total of 2,118 from holding Kratos Defense Security or generate 47.42% 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. Sprott Physical Gold
Performance |
| Timeline |
| Kratos Defense Security |
| Sprott Physical Gold |
Kratos Defense and Sprott Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kratos Defense and Sprott Physical
The main advantage of trading using opposite Kratos Defense and Sprott Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kratos Defense position performs unexpectedly, Sprott Physical 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 Sprott Physical will offset losses from the drop in Sprott Physical's long position.| Kratos Defense vs. L3Harris Technologies | Kratos Defense vs. AeroVironment | Kratos Defense vs. Mercury Systems | Kratos Defense vs. Textron |
| Sprott Physical vs. Sprott Physical Gold | Sprott Physical vs. Sprott Physical Platinum | Sprott Physical vs. Sprott Inc | Sprott Physical vs. Brookfield Real Assets |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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