Correlation Between K9 Gold and MegaWatt Lithium

Can any of the company-specific risk be diversified away by investing in both K9 Gold and MegaWatt Lithium 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 MegaWatt Lithium 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 MegaWatt Lithium and, you can compare the effects of market volatilities on K9 Gold and MegaWatt Lithium 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 MegaWatt Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of K9 Gold and MegaWatt Lithium.

Diversification Opportunities for K9 Gold and MegaWatt Lithium

-0.02

Correlation Coefficient

K9 Gold  MegaWatt Lithium

Good diversification

The 3 months correlation between WDFCF and MegaWatt is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding K9 Gold Corp and MegaWatt Lithium and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MegaWatt Lithium 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 MegaWatt Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MegaWatt Lithium has no effect on the direction of K9 Gold i.e., K9 Gold and MegaWatt Lithium go up and down completely randomly.

Pair Corralation between K9 Gold and MegaWatt Lithium

Assuming the 90 days horizon K9 Gold is expected to generate 2.36 times less return on investment than MegaWatt Lithium. But when comparing it to its historical volatility, K9 Gold Corp is 2.57 times less risky than MegaWatt Lithium. It trades about 0.11 of its potential returns per unit of risk. MegaWatt Lithium and is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  0.92  in MegaWatt Lithium and on May 21, 2025 and sell it today you would earn a total of  0.17  from holding MegaWatt Lithium and or generate 18.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

K9 Gold Corp  vs.  MegaWatt Lithium and

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 8 (%) 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.

MegaWatt Lithium

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in MegaWatt Lithium and are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, MegaWatt Lithium reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with K9 Gold and MegaWatt Lithium

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

The idea behind K9 Gold Corp and MegaWatt Lithium and 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.