Correlation Between Nuvalent and Spectral

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

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

Diversification Opportunities for Nuvalent and Spectral

0.86

Correlation Coefficient

Nuvalent  Spectral

Very poor diversification

The 3 months correlation between Nuvalent and Spectral is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Nuvalent and Spectral AI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectral AI and Nuvalent 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 Nuvalent are associated (or correlated) with Spectral. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectral AI has no effect on the direction of Nuvalent i.e., Nuvalent and Spectral go up and down completely randomly.

Pair Corralation between Nuvalent and Spectral

Given the investment horizon of 90 days Nuvalent is expected to generate 5.22 times less return on investment than Spectral. But when comparing it to its historical volatility, Nuvalent is 2.39 times less risky than Spectral. It trades about 0.1 of its potential returns per unit of risk. Spectral AI is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  120.00  in Spectral AI on May 6, 2025 and sell it today you would earn a total of  116.00  from holding Spectral AI or generate 96.67% return on investment over 90 days.

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

Nuvalent  vs.  Spectral AI

Nuvalent

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nuvalent are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Nuvalent disclosed solid returns over the last few months and may actually be approaching a breakup point.

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 weak basic indicators, Spectral demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nuvalent and Spectral

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

The idea behind Nuvalent and Spectral AI 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.