Historically, stocks and government treasury prices were negatively correlated. Since 2020, however, they have been quite highly positively correlated. SPY and TLT correlation 2002-2019 was -0.31. SPY and TLT correlation 2021-present is +0.61.
So stock and government bond prices have been moving together since the end of 2020. I've been looking for stocks that have negative or near zero correlation to government treasuries from 2021 onward. So, if treasury prices start to fall again, my whole portfolio won't tend to drop along with them.
And they are quite hard to find. Three I've found so far are CB, MO and WTM.
Chubb Limited (CB) is a worldwide insurance provider that is based in Switzerland. They have huge reserves that they invest to gain additional income. When interest rates are higher, they make more investment income. In the most recent quarter, investment income was $1.5 billion vs $0.9 billion in the same quarter 2 years ago. CB and TLT correlation is 0.03 since end of 2020.
Altria (MO). Tobacco company with very high revenue and low debt. MO and TLT correlation is -0.10 since end of 2020.
White Mountains Insurance (WTM). Another insurance provider with large reserves that are invested for income. Investment income was $194 million in most recent year vs. $82.5 million in 2021. WTM and TLT correlation is 0.0 since end of 2020.
I'd appreciate any feedback on the 3 stocks that I listed. Any other stocks that do well when government bond prices fall? Thanks.
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