Correlation Between Canadian Imperial and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Canadian Imperial and Eaton Vance 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 Canadian Imperial and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Imperial Bank and Eaton Vance Municipal, you can compare the effects of market volatilities on Canadian Imperial and Eaton Vance 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 Canadian Imperial with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Imperial and Eaton Vance.
Diversification Opportunities for Canadian Imperial and Eaton Vance
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Canadian and Eaton is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Imperial Bank and Eaton Vance Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Municipal and Canadian Imperial 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 Canadian Imperial Bank are associated (or correlated) with Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Municipal has no effect on the direction of Canadian Imperial i.e., Canadian Imperial and Eaton Vance go up and down completely randomly.
Pair Corralation between Canadian Imperial and Eaton Vance
Allowing for the 90-day total investment horizon Canadian Imperial Bank is expected to generate 1.8 times more return on investment than Eaton Vance. However, Canadian Imperial is 1.8 times more volatile than Eaton Vance Municipal. It trades about 0.11 of its potential returns per unit of risk. Eaton Vance Municipal is currently generating about 0.07 per unit of risk. If you would invest 3,924 in Canadian Imperial Bank on September 2, 2024 and sell it today you would earn a total of 2,552 from holding Canadian Imperial Bank or generate 65.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Imperial Bank vs. Eaton Vance Municipal
Performance |
| Timeline |
| Canadian Imperial Bank |
| Eaton Vance Municipal |
Canadian Imperial and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Imperial and Eaton Vance
The main advantage of trading using opposite Canadian Imperial and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Imperial position performs unexpectedly, Eaton Vance 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 Eaton Vance will offset losses from the drop in Eaton Vance's long position.| Canadian Imperial vs. Bank of Montreal | Canadian Imperial vs. Toronto Dominion Bank | Canadian Imperial vs. Royal Bank of | Canadian Imperial vs. Citigroup |
| Eaton Vance vs. Munivest Fund | Eaton Vance vs. Blackrock Muniyield Quality | Eaton Vance vs. Blackrock Muniyield Quality | Eaton Vance vs. Blackrock Muniholdings Closed |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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