Correlation Between Spectral Med and Nocopi Technologies

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

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

Diversification Opportunities for Spectral Med and Nocopi Technologies

0.48

Correlation Coefficient

Spectral Med  Nocopi Technologies

Very weak diversification

The 3 months correlation between Spectral and Nocopi is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Spectral Med and Nocopi Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nocopi Technologies and Spectral Med 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 Med are associated (or correlated) with Nocopi Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nocopi Technologies has no effect on the direction of Spectral Med i.e., Spectral Med and Nocopi Technologies go up and down completely randomly.

Pair Corralation between Spectral Med and Nocopi Technologies

Assuming the 90 days horizon Spectral Med is expected to generate 3.37 times less return on investment than Nocopi Technologies. But when comparing it to its historical volatility, Spectral Med is 2.67 times less risky than Nocopi Technologies. It trades about 0.03 of its potential returns per unit of risk. Nocopi Technologies is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  150.00  in Nocopi Technologies on May 5, 2025 and sell it today you would earn a total of  8.00  from holding Nocopi Technologies or generate 5.33% return on investment over 90 days.

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

Spectral Med  vs.  Nocopi Technologies

Spectral Med

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Spectral Med are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Spectral Med is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Nocopi Technologies

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nocopi Technologies are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Nocopi Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Spectral Med and Nocopi Technologies

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

The idea behind Spectral Med and Nocopi 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.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.