Stock vs Bond ETF Correlation
The relationship between stocks and bonds is the foundation of most balanced portfolios. This free tool measures it directly for China-listed funds: compare an equity ETF with a government bond ETF and see the Pearson correlation of their daily returns. Open it pre-loaded with CSI 300 vs a 10-year treasury ETF →
Why the stock-bond relationship matters
A classic balanced portfolio leans on stocks and bonds behaving differently: when equities fall, high-quality government bonds often hold their value or rise, cushioning the drawdown. That hedge only works when the two have low or negative correlation, so measuring it is the first step in judging whether a stock-bond mix will actually smooth your returns.
What the numbers tend to show
In China's market, broad equity ETFs and government bond ETFs have frequently shown low — sometimes negative — correlation, consistent with the diversifying role bonds are meant to play. But the relationship is not constant; it can rise toward zero or turn positive in certain rate or liquidity environments. Checking it over several windows reveals how stable the hedge has been.
How to measure it here
Pick an equity ETF (for example a CSI 300 fund) and a government bond ETF (such as a 10-year treasury ETF), choose a lookback period, and calculate. The tool reports the Pearson correlation of their daily returns with a plain-English interpretation, and you can add gold or overseas funds to compare several diversifiers at once.
A research tool, not advice
Correlation describes how two funds moved in the past over your selected window. It is a useful input for thinking about diversification, but it is not a forecast and not investment advice. Combine it with your own goals and risk tolerance.
Frequently asked questions
Are stocks and bonds always negatively correlated?
No. The correlation varies over time and across rate environments. It is often low or negative, which is what makes bonds a useful diversifier, but it can turn positive — so it's worth measuring rather than assuming.
Which China bond ETFs can I use?
Government bond ETFs such as a 10-year treasury ETF (e.g. 511260) or a shorter-duration treasury ETF. Enter any 6-digit bond ETF code in the tool.
Does a negative stock-bond correlation remove risk?
It reduces how much the two move together and can smooth a portfolio, but it doesn't remove risk — both can still lose value, and the relationship can shift.