Correlation Between Sumitomo Chemical and Walker Dunlop

Can any of the company-specific risk be diversified away by investing in both Sumitomo Chemical and Walker Dunlop 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 Walker Dunlop 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 Walker Dunlop, you can compare the effects of market volatilities on Sumitomo Chemical and Walker Dunlop 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 Walker Dunlop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Chemical and Walker Dunlop.

Diversification Opportunities for Sumitomo Chemical and Walker Dunlop

0.57

Correlation Coefficient

Sumitomo Chemical  Walker Dunlop

Very weak diversification

The 3 months correlation between Sumitomo and Walker is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Chemical Co and Walker Dunlop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walker Dunlop 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 Walker Dunlop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walker Dunlop has no effect on the direction of Sumitomo Chemical i.e., Sumitomo Chemical and Walker Dunlop go up and down completely randomly.

Pair Corralation between Sumitomo Chemical and Walker Dunlop

Assuming the 90 days horizon Sumitomo Chemical Co is expected to generate 0.54 times more return on investment than Walker Dunlop. However, Sumitomo Chemical Co is 1.86 times less risky than Walker Dunlop. It trades about 0.05 of its potential returns per unit of risk. Walker Dunlop is currently generating about -0.29 per unit of risk. If you would invest  1,441  in Sumitomo Chemical Co on September 6, 2025 and sell it today you would earn a total of  21.00  from holding Sumitomo Chemical Co or generate 1.46% return on investment over 90 days.

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

Sumitomo Chemical Co  vs.  Walker Dunlop

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.

Walker Dunlop

Risk-Adjusted Performance

Weakest

Over the last 90 days Walker Dunlop has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in January 2026. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Sumitomo Chemical and Walker Dunlop

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

The idea behind Sumitomo Chemical Co and Walker Dunlop 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.