Correlation Between Sumitomo Chemical and BlueScope Steel
Can any of the company-specific risk be diversified away by investing in both Sumitomo Chemical and BlueScope Steel 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 BlueScope Steel 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 BlueScope Steel Ltd, you can compare the effects of market volatilities on Sumitomo Chemical and BlueScope Steel 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 BlueScope Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Chemical and BlueScope Steel.
Diversification Opportunities for Sumitomo Chemical and BlueScope Steel
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sumitomo and BlueScope is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Chemical Co and BlueScope Steel Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlueScope Steel 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 BlueScope Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlueScope Steel has no effect on the direction of Sumitomo Chemical i.e., Sumitomo Chemical and BlueScope Steel go up and down completely randomly.
Pair Corralation between Sumitomo Chemical and BlueScope Steel
Assuming the 90 days horizon Sumitomo Chemical Co is expected to under-perform the BlueScope Steel. But the pink sheet apears to be less risky and, when comparing its historical volatility, Sumitomo Chemical Co is 1.92 times less risky than BlueScope Steel. The pink sheet trades about -0.01 of its potential returns per unit of risk. The BlueScope Steel Ltd is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 7,369 in BlueScope Steel Ltd on September 4, 2025 and sell it today you would earn a total of 418.00 from holding BlueScope Steel Ltd or generate 5.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumitomo Chemical Co vs. BlueScope Steel Ltd
Performance |
| Timeline |
| Sumitomo Chemical |
| BlueScope Steel |
Sumitomo Chemical and BlueScope Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Chemical and BlueScope Steel
The main advantage of trading using opposite Sumitomo Chemical and BlueScope Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Chemical position performs unexpectedly, BlueScope Steel 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 BlueScope Steel will offset losses from the drop in BlueScope Steel's long position.| Sumitomo Chemical vs. Natural Beauty Bio Technology | Sumitomo Chemical vs. Juma Technology Corp | Sumitomo Chemical vs. Richardson Electronics | Sumitomo Chemical vs. Asure Software |
| BlueScope Steel vs. Network Media Group | BlueScope Steel vs. SkyCity Entertainment Group | BlueScope Steel vs. Grupo Carso SAB | BlueScope Steel vs. CarsalesCom Ltd ADR |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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