Unless they are perfectly correlated, the best risk / reward portfolio will include both assets as they will
sometimes move in opposite directions and cancel out each other's risk.
Not exact matches
But rates don't all
move in lockstep:
sometimes those at the long end rise or fall while the shorter end remains unchanged, or even
moves in the
opposite direction.
While the 10 - year Treasury Note
sometimes trends
in the same
direction as Mortgage Bonds, it is not unusual to see them
move in completely
opposite directions.