AGG vs LQD: Correlation
How closely do iShares Core US Aggregate Bond ETF (AGG) and iShares iBoxx Investment Grade Corporate Bond ETF (LQD) trade together? Their weekly returns over three years give a correlation of 0.97, which is very strong.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are AGG and LQD?
On 3 years of weekly data the AGG/LQD correlation comes out at 0.97, very strong, meaning they move nearly in lockstep. Little has changed lately, as the 1-year reading of 0.95 lands near the 3-year figure. The 5-year figure is 0.95, and annualized covariance runs at 37.2 %².
Few assets follow AGG as closely as LQD, which ranks #3 of 34 tracked partners. Their 12-month results are close: +2.3% for AGG against +1.5% for LQD. Stability stands out here, with the rolling one-year correlation confined to 0.93 through 0.98.
How is this computed?
Pearson correlation on weekly returns: ρ(A,B) = cov(rA, rB) / (σA · σB), over windows of 52, 156 and 260 weeks. Covariance is annualized (×52) and expressed in %². Full definitions on the methodology page.
AGG vs LQD: side by side
| AGG (iShares Core US Aggregate Bond ETF) | LQD (iShares iBoxx Investment Grade Corporate Bond ETF) | |
|---|---|---|
| 1-year return | +2.3% | +1.5% |
| 5-year return | -1.1% | -4.1% |
| Volatility (ann.) | 5.3% | 7.3% |
| Beta vs S&P 500 | 0.07 | 0.15 |
| Max drawdown (3Y) | -4.8% | -6.7% |
| Dividend yield | 4.05% | 4.66% |
| Expense ratio | 0.03% | 0.14% |
| Assets under management | $137.1B | $33.0B |
| Sector / category | ETF · Bonds | ETF · Bonds |
AGG, iShares's Intermediate Core Bond fund, carries $137.1B under management, a 0.03% expense ratio, a 4.05% trailing dividend yield. LQD, iShares's Corporate Bond fund, carries $33.0B under management, a 0.14% expense ratio, a 4.66% trailing dividend yield.
Year-by-year returns
| Year | AGG | LQD |
|---|---|---|
| 2022 | -13.0% | -17.9% |
| 2023 | +5.7% | +9.4% |
| 2024 | +1.3% | +0.9% |
| 2025 | +7.2% | +7.9% |
| 2026 | +0.3% | -0.5% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are AGG and LQD good diversifiers for each other?
No. With a correlation of 0.97, AGG and LQD move nearly in lockstep, so holding both adds very little diversification.
FAQ
What is the correlation between AGG and LQD?
Using weekly returns as of 2026-08-27: 0.97 over 3 years, with 0.95 over the last year and 0.95 over 5 years.
Is LQD a good diversifier for AGG?
No. With a correlation of 0.97, AGG and LQD move nearly in lockstep, so holding both adds very little diversification.
What does a correlation of 0.97 mean?
A reading of 0.97 sits on a scale from −1 (opposite moves) through 0 (unrelated) to +1 (identical moves). Correlation captures direction, not magnitude or performance.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/agg-vs-lqd.json
Embed this badge (it refreshes with the data), with attribution:
[](https://www.pairbook.io/pair/agg-vs-lqd/)
The core API is free. Terms and every endpoint in the API documentation.
Related comparisons
Hubs: AGG correlations · LQD correlations
