Correlation Between Sprott Energy and Corn Futures

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

Diversification Opportunities for Sprott Energy and Corn Futures

0.26

Correlation Coefficient

Sprott Energy  Corn Futures

Modest diversification

The 3 months correlation between Sprott and Corn is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Energy Transition and Corn Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corn Futures 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 Corn Futures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corn Futures has no effect on the direction of Sprott Energy i.e., Sprott Energy and Corn Futures go up and down completely randomly.

Pair Corralation between Sprott Energy and Corn Futures

Given the investment horizon of 90 days Sprott Energy Transition is expected to generate 2.89 times more return on investment than Corn Futures. However, Sprott Energy is 2.89 times more volatile than Corn Futures. It trades about 0.16 of its potential returns per unit of risk. Corn Futures is currently generating about 0.1 per unit of risk. If you would invest  2,169  in Sprott Energy Transition on September 10, 2025 and sell it today you would earn a total of  658.00  from holding Sprott Energy Transition or generate 30.34% return on investment over 90 days.

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

Sprott Energy Transition  vs.  Corn Futures

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 12 (%) 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.

Corn Futures

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Corn Futures are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Corn Futures may actually be approaching a critical reversion point that can send shares even higher in January 2026.

Pair Trading with Sprott Energy and Corn Futures

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

The idea behind Sprott Energy Transition and Corn Futures 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 Transaction History module to view history of all your transactions and understand their impact on performance.