We examine the feasibility of applying oximetry for the assessment of the degree of brain activity. Changes in concentration of oxygenated and deoxygenated hemoglobin may be used to determine the activity levels through differential attenuation in red and infrared (IR) spectral lines. We extend the classical mathematical model for oxygen saturation to include multiplicative and additive noises, signal gain, and detector responsivity. We perform temporal correlation between two signals (red and IR) to increase immunity to noise. This is particularly important when we consider dynamic biological processes and that the movement is always present. In the literature the difficulty of movement (differences in optical paths) is resolved with electronic solutions. We improve the effect of time displacement between signals at the level of equations. The considerations of noise in the saturation expression are significant when the signal levels approach zero.© (2006) COPYRIGHT SPIE--The International Society for Optical Engineering. Downloading of the abstract is permitted for personal use only.