Measure
Convexity
Definition
The curvature of the price-yield relationship that duration alone misses.
Formula
ΔP/P ≈ −D_mod Δy + ½ C (Δy)²
How to read it
Positive convexity means prices rise more when yields fall than they drop when yields rise by the same amount.
What it does not tell you
Not all bonds have it. Callable bonds and mortgage-backed securities can exhibit negative convexity, where the asymmetry runs against the holder exactly when rates move most.
Applied in 8 articles
8- Duration and Convexity: What Bond-ETF Investors Get Wrong About Rate Sensitivity
- The Real Cost of Tail-Risk Hedging: Put Options vs Cash vs Trend Following
- TLT vs IEF vs SHY: Building a Treasury Duration Ladder for Different Rate Scenarios
- Bitcoin vs Gold: IBIT vs GLD as a Portfolio Hedge — What the Correlation Data Says
- Why I Track Drawdown Recovery Time, Not Just Max Drawdown
- Interest Rate Cuts in 2026: What Happens to Stocks, Bonds, and Gold?
- Leveraged ETF Satellites in a Long-Term Core: The Drawdown Math Most Plans Skip
- What SGOV and Gold Actually Do: A Quant Look at Defensive Assets in 2026
Every figure computed with this measure on this site follows the conventions set out in the methodology. All measures →