Correlation Between K9 Gold and Atacama Resources

Can any of the company-specific risk be diversified away by investing in both K9 Gold and Atacama Resources 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 K9 Gold and Atacama Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between K9 Gold Corp and Atacama Resources International, you can compare the effects of market volatilities on K9 Gold and Atacama Resources 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 K9 Gold with a short position of Atacama Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of K9 Gold and Atacama Resources.

Diversification Opportunities for K9 Gold and Atacama Resources

-0.27

Correlation Coefficient

K9 Gold  Atacama Resources

Very good diversification

The 3 months correlation between WDFCF and Atacama is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding K9 Gold Corp and Atacama Resources Internationa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atacama Resources and K9 Gold 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 K9 Gold Corp are associated (or correlated) with Atacama Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atacama Resources has no effect on the direction of K9 Gold i.e., K9 Gold and Atacama Resources go up and down completely randomly.

Pair Corralation between K9 Gold and Atacama Resources

Assuming the 90 days horizon K9 Gold Corp is expected to generate 0.78 times more return on investment than Atacama Resources. However, K9 Gold Corp is 1.28 times less risky than Atacama Resources. It trades about 0.12 of its potential returns per unit of risk. Atacama Resources International is currently generating about 0.08 per unit of risk. If you would invest  7.98  in K9 Gold Corp on May 26, 2025 and sell it today you would earn a total of  4.02  from holding K9 Gold Corp or generate 50.38% return on investment over 90 days.

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

K9 Gold Corp  vs.  Atacama Resources Internationa

K9 Gold Corp

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in K9 Gold Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, K9 Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Atacama Resources

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Atacama Resources International are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile basic indicators, Atacama Resources disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with K9 Gold and Atacama Resources

The main advantage of trading using opposite K9 Gold and Atacama Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K9 Gold position performs unexpectedly, Atacama Resources 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 Atacama Resources will offset losses from the drop in Atacama Resources' long position.

The idea behind K9 Gold Corp and Atacama Resources International 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.

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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.