GG5: He that toucheth pitch shall be defiled．

I guess this can be closed. Seems OK.

https://www.bible.com/bible/compare/PRO.13.20

Proverbs 13:20 New Century Version (NCV)
Spend time with the wise and you will become wise, but the friends of fools will suffer.

https://yoji-jukugo.com/近朱必赤/#:~:text=人は交わる相手によって,必ず赤くなる」という意味。

http://www.nishikie.com/stories/TNS-1054-6_confessions_of_evil.html
Proverb (allegory) is modified by 朱(しゆ)に交(まぢ)ハれバ赤(あか)くなる (shiyu ni madjihareba akaku naru) -- which today would be written 朱に交われば赤くなる (Shu ni majiwareba akaku naru) -- meaning "when mixing (mingling, associating) with vermilion, one becomes red" -- in other words, one is inspired to be good or evil according to the friends or company one keeps.

The Japanese proverb reflects part of the the Chinese expression 近朱者赤、近墨者黒 (jìn zhū zhĕ chì, jìn mò zhĕ hēi) -- meaning "those tho get close to cinnabar [China] ink become red, [while] those who get close to soot [India] ink become black" -- attributed to the poet Fu Hsuan (傅玄, Fu Xuan, 217-278) -- among other expressions, like 近墨必緇、近朱必赤.

One reason I started looking at this was because of the dated nature of the gloss.  I wasn't familiar with it (doesn't mean it's bad or wrong, of course), so it didn't seem to clarify the meaning for me.  I actually internalized the "bad" reading from the outset, assuming that red=bad (as in 朱を入れる - to make a correction). 

Googling around I see this is a bible verse.  I ran into the "New Century Version" translation, and it seems a bit more accessible. (linked reference has various translations)

"Spend time with the wise and you will become wise, but the friends of fools will suffer."

What do you think? I don't know that any of the various formulations are extremely commonly known, so modern grammar seems preferable to me.  For what it's worth, I told a 50 year old friend about the "lay down with dogs" idiom, which is apparently also biblical, and he wasn't familiar with it.

I search backwards for the longer Chinese expression referencing both vermillion and soot (black), and found what I think is a better literal gloss.  

Also, "influenced by one's environment" is maybe not as specific as it could be (being overshadowed by a lot of talented people might impact someone negatively, for example, but that would be contrary to this idiom).

@@ -14,3 +14,3 @@
-<gloss>you are the company you keep</gloss>
-<gloss>if you lie down with dogs, you will get up with fleas</gloss>
-<gloss g_type="lit">if you mingle with vermillion, you will turn red</gloss>
+<gloss>people will take on the characteristics of those who surround them</gloss>
+<gloss>spend time with the wise and you will become wise, but the friends of fools will suffer</gloss>
+<gloss g_type="lit">when mixing with vermillion, one becomes red</gloss>

If classes are divivided up by current academic performance, then what will happen to students after that...
https://twitter.com/Tontantan3/status/1630420102678978561
しかし成績によるクラス分けがその後「朱に交われば赤くなる」的に大きく影響すると言われればそれは確かにそうだろうとは思うし、

About changing your surroundings to improve
https://twitter.com/minagawashi/status/1628500627017064449
「朱に交われば赤くなる」。あなたはきっと良い方向へ変わっていける！

That's a good catch... I think I was influenced by some of the older glosses that float around, like "he who touches pitch shall be defiled therewith" and "one rotten apple spoils the barrel", and happened to stumble into a Japanese writeup that confirmed what I expected to hear.

"you are the company you keep" is, I think, usually used judgmentally, and about the quality of one's character (not financial or academic success, etc., or professional sports performance, as I saw in one post). 

朱に交われば赤くなる seems to be a lot more, general in observing that people will be influenced by the environment they are placed it. (there may also be a judgemental after-the-fast usage, but it's certainly not the only usage).

"with wolves", like the older, dropped "pitch" gloss, seems far too negative for how this is used in practice... I might suggest just reverting to where things were, not sure I have anything to add from that. Will think about it

Looking at examples on Twitter, I don't think ふつう、悪い意味の時に使う。 is true.

Important warning given on https://proverb-encyclopedia.com/syunimaziwarreba/
ふつう、悪い意味の時に使う。
「うちの子は進学塾に通うようになったら、朱に交われば赤くなるで、熱心に勉強して成績が上がるようになったの。」
と使うのは誤り。

https://en.wiktionary.org/wiki/if_you_lie_down_with_dogs,_you_get_up_with_fleas#:~:text=Proverb,-if you lie&text=Spending time with undesirable people,take on their undesirable traits.

"Spending time with undesirable people will cause one to take on their undesirable traits."

Some different gloss suggestions...

You could drop the dogs/flees gloss and just leave "you are the company you keep". I think it's basically a perfect match. (Especially if you want to preserve the theoretical ambiguity that it could be used in a positive sense).

In reply to Marcus's comments from 2020, I suspect the 国語辞典 has been lazy with discussing the nuance. 
As with this English saying, in theory it means "if you spend time with bad people, you'll get bad habits, if you spend time with good people, you'll get good habits".

But it's only really used as a cautionary admonition towards people who are doing bad things. (See reference note, ふつう、悪い意味の時に使う. Also, all example sentences in reference are negative）

We rarely say "you are the company the company you keep" of people who spend all their time working with charities and volunteer groups.

==== Note for curious === 
Apparently from a longer Chinese saying, same meaning -  that mixed with black ink turns black, that mixed with vermillion turns red.  What I read wasn't apparent about whether red and black were inherently good or bad - more just the notion that your surroundings rub off on you.

@@ -14,2 +14,3 @@
-<gloss>people are formed by their surroundings</gloss>
-<gloss>walk with the wise and become wise; associate with fools and get in trouble</gloss>
+<gloss>you are the company you keep</gloss>
+<gloss>if you lie down with dogs, you will get up with fleas</gloss>
+<gloss g_type="lit">if you mingle with vermillion, you will turn red</gloss>