Correlation Between Sumitomo Chemical and CleanGo Innovations

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

Diversification Opportunities for Sumitomo Chemical and CleanGo Innovations

0.57

Correlation Coefficient

Sumitomo Chemical  CleanGo Innovations

Very weak diversification

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

Pair Corralation between Sumitomo Chemical and CleanGo Innovations

Assuming the 90 days horizon Sumitomo Chemical Co is expected to generate 0.35 times more return on investment than CleanGo Innovations. However, Sumitomo Chemical Co is 2.88 times less risky than CleanGo Innovations. It trades about 0.13 of its potential returns per unit of risk. CleanGo Innovations is currently generating about 0.0 per unit of risk. If you would invest  1,435  in Sumitomo Chemical Co on September 5, 2025 and sell it today you would earn a total of  64.00  from holding Sumitomo Chemical Co or generate 4.46% 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.  CleanGo Innovations

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 fairly strong primary indicators, Sumitomo Chemical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

CleanGo Innovations

Risk-Adjusted Performance

Weakest

Over the last 90 days CleanGo Innovations 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 nearly stable which may send shares a bit higher in January 2026. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Sumitomo Chemical and CleanGo Innovations

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

The idea behind Sumitomo Chemical Co and CleanGo Innovations 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.