Correlation Between Sprott Energy and 04010LBA0

Can any of the company-specific risk be diversified away by investing in both Sprott Energy and 04010LBA0 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 Sprott Energy and 04010LBA0 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sprott Energy Transition and ARES CAPITAL PORATION, you can compare the effects of market volatilities on Sprott Energy and 04010LBA0 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 Sprott Energy with a short position of 04010LBA0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Energy and 04010LBA0.

Diversification Opportunities for Sprott Energy and 04010LBA0

-0.21

Correlation Coefficient

Sprott Energy  04010LBA0

Very good diversification

The 3 months correlation between Sprott and 04010LBA0 is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Energy Transition and ARES CAPITAL PORATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARES CAPITAL PORATION and Sprott Energy 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 Sprott Energy Transition are associated (or correlated) with 04010LBA0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARES CAPITAL PORATION has no effect on the direction of Sprott Energy i.e., Sprott Energy and 04010LBA0 go up and down completely randomly.

Pair Corralation between Sprott Energy and 04010LBA0

Given the investment horizon of 90 days Sprott Energy Transition is expected to generate 4.68 times more return on investment than 04010LBA0. However, Sprott Energy is 4.68 times more volatile than ARES CAPITAL PORATION. It trades about 0.15 of its potential returns per unit of risk. ARES CAPITAL PORATION is currently generating about -0.11 per unit of risk. If you would invest  2,209  in Sprott Energy Transition on September 9, 2025 and sell it today you would earn a total of  621.00  from holding Sprott Energy Transition or generate 28.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.38%
Values	Daily Returns

Sprott Energy Transition  vs.  ARES CAPITAL PORATION

Sprott Energy Transition

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Energy Transition are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Sprott Energy displayed solid returns over the last few months and may actually be approaching a breakup point.

ARES CAPITAL PORATION

Risk-Adjusted Performance

Weakest

Over the last 90 days ARES CAPITAL PORATION has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 04010LBA0 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sprott Energy and 04010LBA0

The main advantage of trading using opposite Sprott Energy and 04010LBA0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Energy position performs unexpectedly, 04010LBA0 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 04010LBA0 will offset losses from the drop in 04010LBA0's long position.

The idea behind Sprott Energy Transition and ARES CAPITAL PORATION 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.