Correlation Between Neurocrine Biosciences and Alkermes Plc

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

By analyzing existing cross correlation between Neurocrine Biosciences and Alkermes Plc, you can compare the effects of market volatilities on Neurocrine Biosciences and Alkermes Plc 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 Alkermes Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neurocrine Biosciences and Alkermes Plc.

Diversification Opportunities for Neurocrine Biosciences and Alkermes Plc

-0.49

Correlation Coefficient

Neurocrine Biosciences  Alkermes Plc

Very good diversification

The 3 months correlation between Neurocrine and Alkermes is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Neurocrine Biosciences and Alkermes Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alkermes Plc 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 Alkermes Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alkermes Plc has no effect on the direction of Neurocrine Biosciences i.e., Neurocrine Biosciences and Alkermes Plc go up and down completely randomly.

Pair Corralation between Neurocrine Biosciences and Alkermes Plc

Given the investment horizon of 90 days Neurocrine Biosciences is expected to generate 0.81 times more return on investment than Alkermes Plc. However, Neurocrine Biosciences is 1.24 times less risky than Alkermes Plc. It trades about 0.09 of its potential returns per unit of risk. Alkermes Plc is currently generating about -0.1 per unit of risk. If you would invest  11,892  in Neurocrine Biosciences on May 6, 2025 and sell it today you would earn a total of  999.00  from holding Neurocrine Biosciences or generate 8.4% return on investment over 90 days.

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

Neurocrine Biosciences  vs.  Alkermes Plc

Neurocrine Biosciences

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Neurocrine Biosciences are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain forward indicators, Neurocrine Biosciences may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Alkermes Plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alkermes Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward-looking signals remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Neurocrine Biosciences and Alkermes Plc

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

The idea behind Neurocrine Biosciences and Alkermes Plc 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.