St. Louis Financial Stress vs High Yield (HYG)
Live side-by-side comparison with current values, changes, and key statistics.
Why This Comparison Matters
STLFSI4 combines multiple Treasury and credit market stress measures. HYG is the credit-specific ETF. When STLFSI4 rises with HYG weakening, broad financial stress includes credit. When STLFSI4 rises but HYG holds up, stress is concentrated in Treasury markets (funding issues) rather than credit (default risk).
Cross-Asset Analysis
Financial Stress Index (StL) measures st. Louis Fed Financial Stress Index, below zero = below-average stress, while High Yield Credit (HYG) measures iShares iBoxx High Yield Corporate Bond ETF; tracking the two side by side turns that distinction into a tradable signal for the peer pair relationship. Factor tilts expressed through the Financial Stress Index (StL)-High Yield Credit (HYG) selection allow managers to adjust style exposure without changing their overall asset allocation.
Inside the Credit & Financial Stress universe, Financial Stress Index (StL) and High Yield Credit (HYG) represent different flavors of the same underlying exposure. A peer comparison like Financial Stress Index (StL) versus High Yield Credit (HYG) strips out the common-factor beta and leaves behind the differences in sector mix, capitalization, style, or geography. The Financial Stress Index (StL)-High Yield Credit (HYG) spread captures the tilt between two variants of the same asset: one may be more defensive, one more cyclical.
Corporate action events, including buybacks or spin-offs affecting constituents of Financial Stress Index (StL) or High Yield Credit (HYG), can distort the spread relative to its intended factor tilt. Flows matter for the Financial Stress Index (StL)-High Yield Credit (HYG) relationship: when one peer attracts more capital, it outperforms on demand pressure that often mean-reverts. Sector, style, and geographic dominance cycles each produce multi-year relative performance episodes between Financial Stress Index (StL) and High Yield Credit (HYG).
90-Day Statistics
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Frequently Asked Questions
What is the relationship between Financial Stress Index (StL) and High Yield Credit (HYG)?+
Financial Stress Index (StL) and High Yield Credit (HYG) are connected through shared asset class exposure with different factor tilts. When the underlying asset class shifts, both respond, though with different sensitivities and at different speeds. The spread between Financial Stress Index (StL) and High Yield Credit (HYG) captures the specific macro signal that flows through this relationship.
When does Financial Stress Index (StL) typically lead High Yield Credit (HYG)?+
Financial Stress Index (StL) tends to lead High Yield Credit (HYG) during rotation episodes between the two factor exposures. In those periods, moves in Financial Stress Index (StL) precede corresponding moves in High Yield Credit (HYG) by days to weeks, depending on the transmission channel and the depth of each market.
How are Financial Stress Index (StL) and High Yield Credit (HYG) historically correlated?+
Long-run correlation between Financial Stress Index (StL) and High Yield Credit (HYG) varies by regime. Peers in the same asset class are highly correlated in direction, with the spread reflecting factor tilts and rotation dynamics. 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 Financial Stress Index (StL)-High Yield Credit (HYG) relationship.
What macro conditions drive divergence between Financial Stress Index (StL) and High Yield Credit (HYG)?+
Divergence between Financial Stress Index (StL) and High Yield Credit (HYG) typically arises from index reconstitution, mega-cap earnings surprises, or liquidity differences between the peers. 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 Financial Stress Index (StL) or High Yield Credit (HYG).
Is Financial Stress Index (StL) a hedge for High Yield Credit (HYG)?+
Peers like Financial Stress Index (StL) and High Yield Credit (HYG) do not hedge each other; both rise or fall with the shared asset class, and using the pair as a spread trade is different from using it as a hedge. Effective hedging requires matching the hedge to the specific risk being protected, and the Financial Stress Index (StL)-High Yield Credit (HYG) 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.