Tuesday, March 30, 2010

TLT and TBT VS 10Y and 30Y Treasuries

Here is the third part of our series of posts on TLT and treasuries.

I plotted TLT and TBT on the same chart with the yields of the 10-y and the 30-year US Treasuries.

It is very clear that both ETFs are very highly correlated with both these long term yields. The highs on TLT coincide with the lows, and TBT is the inverse.

Here are the actual calculated correlations covering 2010:

0.91 and 0.95 are very high indeed.

Therefore, if yields rise, you know what will happen the TLT and TBT.

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