Correlation Between Spectral and Neuroone Medical

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

By analyzing existing cross correlation between Spectral AI and Neuroone Medical Technologies, you can compare the effects of market volatilities on Spectral and Neuroone Medical 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 Spectral with a short position of Neuroone Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spectral and Neuroone Medical.

Diversification Opportunities for Spectral and Neuroone Medical

-0.28

Correlation Coefficient

Spectral  Neuroone Medical

Very good diversification

The 3 months correlation between Spectral and Neuroone is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Spectral AI and Neuroone Medical Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuroone Medical Tec and Spectral 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 Spectral AI are associated (or correlated) with Neuroone Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neuroone Medical Tec has no effect on the direction of Spectral i.e., Spectral and Neuroone Medical go up and down completely randomly.

Pair Corralation between Spectral and Neuroone Medical

Given the investment horizon of 90 days Spectral is expected to generate 2.54 times less return on investment than Neuroone Medical. In addition to that, Spectral is 1.24 times more volatile than Neuroone Medical Technologies. It trades about 0.13 of its total potential returns per unit of risk. Neuroone Medical Technologies is currently generating about 0.41 per unit of volatility. If you would invest  67.00  in Neuroone Medical Technologies on October 10, 2024 and sell it today you would earn a total of  47.00  from holding Neuroone Medical Technologies or generate 70.15% return on investment over 90 days.

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

Spectral AI  vs.  Neuroone Medical Technologies

Spectral AI

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Spectral AI are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Spectral demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Neuroone Medical Tec

Risk-Adjusted Performance

6 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Neuroone Medical Technologies are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Neuroone Medical exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Spectral and Neuroone Medical

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

The idea behind Spectral AI and Neuroone Medical Technologies 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.

Check out your portfolio center.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.