Correlation Between Spectral and Co Diagnostics

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

By analyzing existing cross correlation between Spectral AI and Co Diagnostics, you can compare the effects of market volatilities on Spectral and Co Diagnostics 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 Co Diagnostics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spectral and Co Diagnostics.

Diversification Opportunities for Spectral and Co Diagnostics

-0.6

Correlation Coefficient

Spectral  Co Diagnostics

Excellent diversification

The 3 months correlation between Spectral and CODX is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Spectral AI and Co Diagnostics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Co Diagnostics 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 Co Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Co Diagnostics has no effect on the direction of Spectral i.e., Spectral and Co Diagnostics go up and down completely randomly.

Pair Corralation between Spectral and Co Diagnostics

Given the investment horizon of 90 days Spectral AI is expected to generate 1.13 times more return on investment than Co Diagnostics. However, Spectral is 1.13 times more volatile than Co Diagnostics. It trades about 0.21 of its potential returns per unit of risk. Co Diagnostics is currently generating about -0.08 per unit of risk. If you would invest  129.00  in Spectral AI on May 1, 2025 and sell it today you would earn a total of  117.00  from holding Spectral AI or generate 90.7% return on investment over 90 days.

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

Spectral AI  vs.  Co Diagnostics

Spectral AI

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Spectral AI are ranked lower than 16 (%) 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.

Co Diagnostics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Co Diagnostics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Spectral and Co Diagnostics

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

The idea behind Spectral AI and Co Diagnostics 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.