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bonds ↔ credit risk

Relations (1)

related 2.00 — strongly supporting 3 facts

Bonds are inherently subject to credit risk as a primary investment consideration [1], [2]. Furthermore, the level of credit risk varies across different bond types, influencing their market performance and correlations [3].

Facts (3)

Sources
Wealthfront Classic Portfolio Investment Methodology White Paper research.wealthfront.com Wealthfront 2 facts
claimCorrelations between equities and different types of bonds range from zero for US bonds, to slightly positive for US corporate bonds, and very positive for emerging market bonds, reflecting the increasing credit risk of these bond types.
claimBonds are subject to risks such as interest rate changes and credit risk.
Understanding The Risk And Return Tradeoff - FasterCapital fastercapital.com FasterCapital 1 fact
claimCredit risk, also known as default risk, is the possibility that a borrower will fail to repay debt obligations, which is a relevant consideration when investing in bonds or lending money.