Bond and equities normally have a negatively correlated relationship – meaning as one goes up, the other tends to go down, and vice versa. Additionally, equities also tend to have a higher volatility than bonds. Currently, the correlation between bonds and equities is positive and bonds have a higher implied volatility - this represents an opportunity.
Today, Tom Sosnoff and Tony Battista cover the relationship between the bond ETF (TLT) and the S&P 500 ETF (SPY). The guys explain how these two specific environments can provide us with unique trading opportunities.