Correlation Between Zijin Mining and Airbus SE

Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Airbus SE 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 Zijin Mining and Airbus SE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Zijin Mining Group and Airbus SE, you can compare the effects of market volatilities on Zijin Mining and Airbus SE 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 Zijin Mining with a short position of Airbus SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Airbus SE.

Diversification Opportunities for Zijin Mining and Airbus SE

0.84

Correlation Coefficient

Zijin Mining  Airbus SE

Very poor diversification

The 3 months correlation between Zijin and Airbus is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Airbus SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airbus SE and Zijin Mining 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 Zijin Mining Group are associated (or correlated) with Airbus SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airbus SE has no effect on the direction of Zijin Mining i.e., Zijin Mining and Airbus SE go up and down completely randomly.

Pair Corralation between Zijin Mining and Airbus SE

Assuming the 90 days horizon Zijin Mining is expected to generate 1.2 times less return on investment than Airbus SE. In addition to that, Zijin Mining is 1.37 times more volatile than Airbus SE. It trades about 0.14 of its total potential returns per unit of risk. Airbus SE is currently generating about 0.23 per unit of volatility. If you would invest  3,440  in Airbus SE on April 24, 2025 and sell it today you would earn a total of  1,200  from holding Airbus SE or generate 34.88% return on investment over 90 days.

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

Zijin Mining Group  vs.  Airbus SE

Zijin Mining Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zijin Mining Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Zijin Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Airbus SE

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Airbus SE are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Airbus SE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zijin Mining and Airbus SE

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

The idea behind Zijin Mining Group and Airbus SE 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..