Correlation Between TIL and Spencers Retail

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

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

Diversification Opportunities for TIL and Spencers Retail

-0.16

Correlation Coefficient

TIL  Spencers Retail

Good diversification

The 3 months correlation between TIL and Spencers is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding TIL Limited and Spencers Retail Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spencers Retail and TIL 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 TIL Limited are associated (or correlated) with Spencers Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spencers Retail has no effect on the direction of TIL i.e., TIL and Spencers Retail go up and down completely randomly.

Pair Corralation between TIL and Spencers Retail

Assuming the 90 days trading horizon TIL Limited is expected to generate 1.43 times more return on investment than Spencers Retail. However, TIL is 1.43 times more volatile than Spencers Retail Limited. It trades about 0.28 of its potential returns per unit of risk. Spencers Retail Limited is currently generating about -0.05 per unit of risk. If you would invest  22,498  in TIL Limited on April 25, 2025 and sell it today you would earn a total of  14,052  from holding TIL Limited or generate 62.46% return on investment over 90 days.

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

TIL Limited  vs.  Spencers Retail Limited

TIL Limited

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TIL Limited are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, TIL exhibited solid returns over the last few months and may actually be approaching a breakup point.

Spencers Retail

Risk-Adjusted Performance

Very Weak

Over the last 90 days Spencers Retail Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with TIL and Spencers Retail

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

The idea behind TIL Limited and Spencers Retail Limited 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.