Correlation Between Averbuch Formica and Plastofil

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

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

Diversification Opportunities for Averbuch Formica and Plastofil

0.34

Correlation Coefficient

Averbuch Formica  Plastofil

Weak diversification

The 3 months correlation between Averbuch and Plastofil is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Averbuch Formica Center and Plastofil L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plastofil L and Averbuch Formica 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 Averbuch Formica Center are associated (or correlated) with Plastofil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plastofil L has no effect on the direction of Averbuch Formica i.e., Averbuch Formica and Plastofil go up and down completely randomly.

Pair Corralation between Averbuch Formica and Plastofil

Assuming the 90 days trading horizon Averbuch Formica Center is expected to generate 2.7 times more return on investment than Plastofil. However, Averbuch Formica is 2.7 times more volatile than Plastofil L. It trades about 0.01 of its potential returns per unit of risk. Plastofil L is currently generating about -0.25 per unit of risk. If you would invest  136,300  in Averbuch Formica Center on October 6, 2025 and sell it today you would lose (1,700) from holding Averbuch Formica Center or give up 1.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	97.92%
Values	Daily Returns

Averbuch Formica Center  vs.  Plastofil L

Averbuch Formica Center

Risk-Adjusted Performance

Weakest

Over the last 90 days Averbuch Formica Center has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Averbuch Formica is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Plastofil L

Risk-Adjusted Performance

Weakest

Over the last 90 days Plastofil L has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2026. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Averbuch Formica and Plastofil

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

The idea behind Averbuch Formica Center and Plastofil L 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.