Correlation Between Este Lauder and Nokia

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

By analyzing existing cross correlation between The Este Lauder and Nokia, you can compare the effects of market volatilities on Este Lauder and Nokia 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 Este Lauder with a short position of Nokia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Este Lauder and Nokia.

Diversification Opportunities for Este Lauder and Nokia

-0.53

Correlation Coefficient

Este Lauder  Nokia

Excellent diversification

The 3 months correlation between Este and Nokia is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding The Este Lauder and Nokia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nokia and Este Lauder 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 The Este Lauder are associated (or correlated) with Nokia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nokia has no effect on the direction of Este Lauder i.e., Este Lauder and Nokia go up and down completely randomly.

Pair Corralation between Este Lauder and Nokia

Assuming the 90 days horizon The Este Lauder is expected to generate 2.07 times more return on investment than Nokia. However, Este Lauder is 2.07 times more volatile than Nokia. It trades about 0.24 of its potential returns per unit of risk. Nokia is currently generating about -0.13 per unit of risk. If you would invest  104,469  in The Este Lauder on April 25, 2025 and sell it today you would earn a total of  62,031  from holding The Este Lauder or generate 59.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

The Este Lauder  vs.  Nokia

Este Lauder

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in The Este Lauder are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak primary indicators, Este Lauder showed solid returns over the last few months and may actually be approaching a breakup point.

Nokia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nokia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Este Lauder and Nokia

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

The idea behind The Este Lauder and Nokia 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.