Correlation Between Sprott Energy and USCF Sustainable

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

Diversification Opportunities for Sprott Energy and USCF Sustainable

0.9

Correlation Coefficient

Sprott Energy  USCF Sustainable

Almost no diversification

The 3 months correlation between Sprott and USCF is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Energy Transition and USCF Sustainable Battery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USCF Sustainable Battery 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 USCF Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USCF Sustainable Battery has no effect on the direction of Sprott Energy i.e., Sprott Energy and USCF Sustainable go up and down completely randomly.

Pair Corralation between Sprott Energy and USCF Sustainable

Given the investment horizon of 90 days Sprott Energy Transition is expected to generate 1.62 times more return on investment than USCF Sustainable. However, Sprott Energy is 1.62 times more volatile than USCF Sustainable Battery. It trades about 0.31 of its potential returns per unit of risk. USCF Sustainable Battery is currently generating about 0.11 per unit of risk. If you would invest  1,449  in Sprott Energy Transition on May 18, 2025 and sell it today you would earn a total of  688.00  from holding Sprott Energy Transition or generate 47.48% return on investment over 90 days.

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

Sprott Energy Transition  vs.  USCF Sustainable Battery

Sprott Energy Transition

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Energy Transition are ranked lower than 24 (%) 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.

USCF Sustainable Battery

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in USCF Sustainable Battery are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, USCF Sustainable may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Sprott Energy and USCF Sustainable

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

The idea behind Sprott Energy Transition and USCF Sustainable Battery 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.