High Yield (HYG) vs Long Treasury (TLT)
Live side-by-side comparison with current values, changes, and key statistics.
Why This Comparison Matters
HYG/TLT is one of the cleanest risk-on versus risk-off signals. HYG outperformance signals credit-cycle health, tightening spreads, and risk appetite. TLT outperformance signals recession fears, safe-haven demand, or expected rate cuts. Turns in the ratio often precede similar turns in equity markets.
Cross-Asset Analysis
High Yield Credit (HYG) measures iShares iBoxx High Yield Corporate Bond ETF, while 20Y+ Treasury (TLT) measures iShares 20+ Year Treasury Bond ETF, long-duration rates proxy; tracking the two side by side turns that distinction into a tradable signal for the cross asset pair relationship. Tactical allocators reposition across the High Yield Credit (HYG)-20Y+ Treasury (TLT) spread based on where each asset sits relative to its theoretical anchor. Policy interventions can mechanically reshape the High Yield Credit (HYG)-20Y+ Treasury (TLT) spread, most notably when central banks absorb specific asset classes.
Idiosyncratic shocks in either High Yield Credit (HYG) or 20Y+ Treasury (TLT) produce spread moves unrelated to the broader macro story. Watching High Yield Credit (HYG) in tandem with 20Y+ Treasury (TLT) offers insight into how macro factors flow across different parts of the global market structure. Cross-asset pairs like High Yield Credit (HYG) compared with 20Y+ Treasury (TLT) surface the macro variables that span asset classes: liquidity, inflation, real rates, and risk appetite.
The connection between High Yield Credit (HYG) and 20Y+ Treasury (TLT) runs through shared macro drivers, and isolating the spread separates common factors from idiosyncratic noise. Implied volatility regimes in High Yield Credit (HYG) and 20Y+ Treasury (TLT) transmit through hedging flows that link one tape to the other via dealer balance sheets.
90-Day Statistics
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Frequently Asked Questions
What is the relationship between High Yield Credit (HYG) and 20Y+ Treasury (TLT)?+
High Yield Credit (HYG) and 20Y+ Treasury (TLT) are connected through shared macro drivers across asset classes. When the dominant macro driver shifts, both respond, though with different sensitivities and at different speeds. The spread between High Yield Credit (HYG) and 20Y+ Treasury (TLT) captures the specific macro signal that flows through this relationship.
When does High Yield Credit (HYG) typically lead 20Y+ Treasury (TLT)?+
High Yield Credit (HYG) tends to lead 20Y+ Treasury (TLT) during macro regime changes, where the more liquid asset moves first. In those periods, moves in High Yield Credit (HYG) precede corresponding moves in 20Y+ Treasury (TLT) by days to weeks, depending on the transmission channel and the depth of each market.
How are High Yield Credit (HYG) and 20Y+ Treasury (TLT) historically correlated?+
Long-run correlation between High Yield Credit (HYG) and 20Y+ Treasury (TLT) varies by regime. Cross-asset correlations vary by regime, tending to tighten in stress and loosen during normal conditions. The correlation is not stable: it shifts with macro conditions, and the periods when it breaks down are often the most informative moments in the High Yield Credit (HYG)-20Y+ Treasury (TLT) relationship.
What macro conditions drive divergence between High Yield Credit (HYG) and 20Y+ Treasury (TLT)?+
Divergence between High Yield Credit (HYG) and 20Y+ Treasury (TLT) typically arises from idiosyncratic shocks in one asset, policy interventions, or structural shifts in demand. When one asset's idiosyncratic drivers dominate, the spread moves in ways that the common macro story does not predict, which is usually a signal to look more carefully at the specific drivers at work in High Yield Credit (HYG) or 20Y+ Treasury (TLT).
Is High Yield Credit (HYG) a hedge for 20Y+ Treasury (TLT)?+
Cross-asset hedges between High Yield Credit (HYG) and 20Y+ Treasury (TLT) work when the macro drivers of the two assets are sufficiently decorrelated, which depends on the regime and therefore needs to be reviewed as conditions change. Effective hedging requires matching the hedge to the specific risk being protected, and the High Yield Credit (HYG)-20Y+ Treasury (TLT) pair is best stress-tested under scenarios the investor most worries about before being sized into a real portfolio.
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Data sourced from FRED, CoinGecko, CBOE, and other providers. This page is for informational purposes only and does not constitute financial advice. Past performance does not guarantee future results.