Correlation Between Neurocrine Biosciences and InFintT Acquisition

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

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

Diversification Opportunities for Neurocrine Biosciences and InFintT Acquisition

-0.51

Correlation Coefficient

Neurocrine Biosciences  InFintT Acquisition

Excellent diversification

The 3 months correlation between Neurocrine and InFintT is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Neurocrine Biosciences and InFintT Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InFintT Acquisition Corp and Neurocrine Biosciences 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 Neurocrine Biosciences are associated (or correlated) with InFintT Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InFintT Acquisition Corp has no effect on the direction of Neurocrine Biosciences i.e., Neurocrine Biosciences and InFintT Acquisition go up and down completely randomly.

Pair Corralation between Neurocrine Biosciences and InFintT Acquisition

Given the investment horizon of 90 days Neurocrine Biosciences is expected to generate 0.25 times more return on investment than InFintT Acquisition. However, Neurocrine Biosciences is 3.93 times less risky than InFintT Acquisition. It trades about 0.04 of its potential returns per unit of risk. InFintT Acquisition Corp is currently generating about -0.1 per unit of risk. If you would invest  11,728  in Neurocrine Biosciences on October 3, 2024 and sell it today you would earn a total of  1,978  from holding Neurocrine Biosciences or generate 16.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	69.29%
Values	Daily Returns

Neurocrine Biosciences  vs.  InFintT Acquisition Corp

Neurocrine Biosciences

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Neurocrine Biosciences are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward indicators, Neurocrine Biosciences showed solid returns over the last few months and may actually be approaching a breakup point.

InFintT Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days InFintT Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, InFintT Acquisition is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Neurocrine Biosciences and InFintT Acquisition

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

The idea behind Neurocrine Biosciences and InFintT Acquisition Corp 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.