Correlation Between Zymeworks Common and Sumitomo Chemical

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

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

Diversification Opportunities for Zymeworks Common and Sumitomo Chemical

0.74

Correlation Coefficient

Zymeworks Common  Sumitomo Chemical

Poor diversification

The 3 months correlation between Zymeworks and Sumitomo is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Zymeworks Common Stock and Sumitomo Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumitomo Chemical and Zymeworks Common 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 Zymeworks Common Stock are associated (or correlated) with Sumitomo Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumitomo Chemical has no effect on the direction of Zymeworks Common i.e., Zymeworks Common and Sumitomo Chemical go up and down completely randomly.

Pair Corralation between Zymeworks Common and Sumitomo Chemical

Given the investment horizon of 90 days Zymeworks Common Stock is expected to generate 1.62 times more return on investment than Sumitomo Chemical. However, Zymeworks Common is 1.62 times more volatile than Sumitomo Chemical Co. It trades about 0.16 of its potential returns per unit of risk. Sumitomo Chemical Co is currently generating about 0.2 per unit of risk. If you would invest  1,432  in Zymeworks Common Stock on July 21, 2025 and sell it today you would earn a total of  408.00  from holding Zymeworks Common Stock or generate 28.49% return on investment over 90 days.

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

Zymeworks Common Stock  vs.  Sumitomo Chemical Co

Zymeworks Common Stock

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zymeworks Common Stock are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating primary indicators, Zymeworks Common exhibited solid returns over the last few months and may actually be approaching a breakup point.

Sumitomo Chemical

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sumitomo Chemical Co are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile primary indicators, Sumitomo Chemical showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zymeworks Common and Sumitomo Chemical

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

The idea behind Zymeworks Common Stock and Sumitomo Chemical Co 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.