Classic 60/40: the Risk X-Ray
The benchmark against which every other allocation in this catalog is measured. Two funds, one ratio, half a century of institutional practice. The interesting question in 2026 is not what the 60/40 is but whether its central assumption, that bonds zig when stocks zag, still holds; the stock-bond correlation measured below on the last three years answers with current data rather than folklore.
The traditional balanced allocation, standard in institutional and retail portfolios for decades
Analysis as of Friday 2026-08-28 · recomputed weekly from daily market data · methodology
What the Classic 60/40 holds
The published allocation: 60% stocks, 40% investment-grade bonds.
Where the risk actually sits
The capital says one thing, the covariance another: VTI carries 91.0% of the portfolio's risk on 60.0% of its money, while BND contributes just 9.0%.
| Fund | Share of risk | Risk | Capital | Beta | Role |
|---|---|---|---|---|---|
| VTI | 91.0% | 60.0% | 1.01 | risk engine 60% of the capital but 91% of the risk | |
| BND | 9.0% | 40.0% | 0.06 | shock absorber |
How the pieces move together
| Holding | VTI | BND |
|---|---|---|
| VTI 60% | 1.00 | |
| BND 40% | 0.20 | 1.00 |
Pearson correlation of weekly returns · 156-week common window ending 2026-08-28 · pairbook.io
The worst it would have been
Over the analysis window, this mix would have fallen at worst -10.1% (from the week of 2024-12-13 to 2025-04-11), shallower than the S&P 500's -16.9% over the same weeks, and it has since recovered that peak.
Worst weeks of the mix: -5.1% (week ending 2025-04-11), -2.2% (week ending 2025-03-14), -2.1% (week ending 2023-10-27).
FAQ
Is the 60/40 dead, as the headlines keep saying?
The design depends on the stock-bond correlation staying low or negative. It failed in 2022, when both fell together, and the obituaries followed. The correlation figure above is the live measurement; the portfolio's fate follows it.
Where does the risk sit in a 60/40?
Not 60/40: equity typically contributes on the order of ninety percent of the total risk, and the table above shows the exact current split. Risk parity strategies exist precisely because of this imbalance.
Run this analysis on your own portfolio
The same X-ray, risk contributions, correlation blocks, ETF overlap, runs on any mix of 4,700+ US stocks and ETFs: paste your holdings into the free portfolio X-ray, or ask an AI assistant with the PairBook MCP server.
