Correlation Between Sumitomo Chemical and ISE Chemicals

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

By analyzing existing cross correlation between Sumitomo Chemical Co and ISE Chemicals, you can compare the effects of market volatilities on Sumitomo Chemical and ISE Chemicals 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 Sumitomo Chemical with a short position of ISE Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Chemical and ISE Chemicals.

Diversification Opportunities for Sumitomo Chemical and ISE Chemicals

0.0

Correlation Coefficient

Sumitomo Chemical  ISE Chemicals

Pay attention - limited upside

The 3 months correlation between Sumitomo and ISE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Chemical Co and ISE Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ISE Chemicals and Sumitomo Chemical 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 Sumitomo Chemical Co are associated (or correlated) with ISE Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ISE Chemicals has no effect on the direction of Sumitomo Chemical i.e., Sumitomo Chemical and ISE Chemicals go up and down completely randomly.

Pair Corralation between Sumitomo Chemical and ISE Chemicals

If you would invest  1,457  in Sumitomo Chemical Co on September 13, 2025 and sell it today you would earn a total of  18.00  from holding Sumitomo Chemical Co or generate 1.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Sumitomo Chemical Co  vs.  ISE Chemicals

Sumitomo Chemical

Risk-Adjusted Performance

Weakest

Over the last 90 days Sumitomo Chemical Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

ISE Chemicals

Risk-Adjusted Performance

Weakest

Over the last 90 days ISE Chemicals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, ISE Chemicals is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Sumitomo Chemical and ISE Chemicals

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

The idea behind Sumitomo Chemical Co and ISE Chemicals 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.