Correlation Between Kratos Defense and Wendys
Can any of the company-specific risk be diversified away by investing in both Kratos Defense and Wendys 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 Wendys 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 The Wendys Co, you can compare the effects of market volatilities on Kratos Defense and Wendys 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 Wendys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kratos Defense and Wendys.
Diversification Opportunities for Kratos Defense and Wendys
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kratos and Wendys is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Kratos Defense Security and The Wendys Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Wendys 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 Wendys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Wendys has no effect on the direction of Kratos Defense i.e., Kratos Defense and Wendys go up and down completely randomly.
Pair Corralation between Kratos Defense and Wendys
Given the investment horizon of 90 days Kratos Defense Security is expected to generate 1.65 times more return on investment than Wendys. However, Kratos Defense is 1.65 times more volatile than The Wendys Co. It trades about 0.18 of its potential returns per unit of risk. The Wendys Co is currently generating about -0.1 per unit of risk. If you would invest 5,878 in Kratos Defense Security on July 20, 2025 and sell it today you would earn a total of 2,434 from holding Kratos Defense Security or generate 41.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kratos Defense Security vs. The Wendys Co
Performance |
| Timeline |
| Kratos Defense Security |
| The Wendys |
Kratos Defense and Wendys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kratos Defense and Wendys
The main advantage of trading using opposite Kratos Defense and Wendys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kratos Defense position performs unexpectedly, Wendys 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 Wendys will offset losses from the drop in Wendys' long position.| Kratos Defense vs. Woodward | Kratos Defense vs. Textron | Kratos Defense vs. BWX Technologies | Kratos Defense vs. MasTec Inc |
| Wendys vs. Papa Johns International | Wendys vs. Arcos Dorados Holdings | Wendys vs. Kohls | Wendys vs. Century Communities |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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