AGG vs SHY: Correlation
Measured on weekly returns over the past three years, iShares Core US Aggregate Bond ETF (AGG) and iShares 1-3 Year Treasury Bond ETF (SHY) carry a correlation of 0.85, a very strong link.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are AGG and SHY?
On 3 years of weekly data the AGG/SHY correlation comes out at 0.85, very strong, meaning they move nearly in lockstep. Recent behaviour matches the longer record: 0.85 over 1 year against 0.85 over 3. The 5-year figure is 0.81, and annualized covariance runs at 7.0 %².
Among the 34 assets we track against AGG, SHY ranks #6 by 3-year correlation. Twelve-month performance is nearly a tie, at +2.3% for AGG and +2.5% for SHY. Stability stands out here, with the rolling one-year correlation confined to 0.74 through 0.92. Note the risk asymmetry: AGG runs 3.3 times the annualized volatility of the other leg, so equal-weighting the two is not an equal-risk position.
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 SHY: side by side
| AGG (iShares Core US Aggregate Bond ETF) | SHY (iShares 1-3 Year Treasury Bond ETF) | |
|---|---|---|
| 1-year return | +2.3% | +2.5% |
| 5-year return | -1.1% | +9.6% |
| Volatility (ann.) | 5.3% | 1.6% |
| Beta vs S&P 500 | 0.07 | 0.00 |
| Max drawdown (3Y) | -4.8% | -1.0% |
| Dividend yield | 4.05% | 3.65% |
| Expense ratio | 0.03% | 0.15% |
| Assets under management | $137.1B | $25.1B |
| Sector / category | ETF · Bonds | ETF · Bonds |
On the fund side, AGG sits in the Intermediate Core Bond category at iShares, with $137.1B under management, a 0.03% expense ratio, a 4.05% trailing dividend yield. SHY, iShares's Short Government fund, carries $25.1B under management, a 0.15% expense ratio, a 3.65% trailing dividend yield.
Year-by-year returns
| Year | AGG | SHY |
|---|---|---|
| 2022 | -13.0% | -3.9% |
| 2023 | +5.7% | +4.2% |
| 2024 | +1.3% | +3.9% |
| 2025 | +7.2% | +5.0% |
| 2026 | +0.3% | +1.1% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are AGG and SHY good diversifiers for each other?
Not really. At 0.85, the two trade almost as one position, and owning both buys little extra protection.
FAQ
What is the correlation between AGG and SHY?
Using weekly returns as of 2026-08-27: 0.85 over 3 years, with 0.85 over the last year and 0.81 over 5 years.
Is SHY a good diversifier for AGG?
Not really. At 0.85, the two trade almost as one position, and owning both buys little extra protection.
What does a correlation of 0.85 mean?
A reading of 0.85 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-shy.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/agg-vs-shy/)
No key needed, free to use. Full endpoint list in the API documentation.
Related comparisons
Hubs: AGG correlations · SHY correlations
