Correlation Between Kratos Defense and Dynamic Total

Can any of the company-specific risk be diversified away by investing in both Kratos Defense and Dynamic Total 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 Dynamic Total 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 Dynamic Total Return, you can compare the effects of market volatilities on Kratos Defense and Dynamic Total 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 Dynamic Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kratos Defense and Dynamic Total.

Diversification Opportunities for Kratos Defense and Dynamic Total

0.84

Correlation Coefficient

Kratos Defense  Dynamic Total

Very poor diversification

The 3 months correlation between Kratos and Dynamic is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Kratos Defense Security and Dynamic Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynamic Total Return 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 Dynamic Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynamic Total Return has no effect on the direction of Kratos Defense i.e., Kratos Defense and Dynamic Total go up and down completely randomly.

Pair Corralation between Kratos Defense and Dynamic Total

Given the investment horizon of 90 days Kratos Defense Security is expected to generate 18.62 times more return on investment than Dynamic Total. However, Kratos Defense is 18.62 times more volatile than Dynamic Total Return. It trades about 0.24 of its potential returns per unit of risk. Dynamic Total Return is currently generating about 0.31 per unit of risk. If you would invest  3,588  in Kratos Defense Security on May 3, 2025 and sell it today you would earn a total of  2,282  from holding Kratos Defense Security or generate 63.6% return on investment over 90 days.

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

Kratos Defense Security  vs.  Dynamic Total Return

Kratos Defense Security

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kratos Defense Security are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Kratos Defense unveiled solid returns over the last few months and may actually be approaching a breakup point.

Dynamic Total Return

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dynamic Total Return are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Dynamic Total is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kratos Defense and Dynamic Total

The main advantage of trading using opposite Kratos Defense and Dynamic Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kratos Defense position performs unexpectedly, Dynamic Total 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 Dynamic Total will offset losses from the drop in Dynamic Total's long position.

The idea behind Kratos Defense Security and Dynamic Total Return 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.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.