BND vs SPY: Correlation
How closely do Vanguard Total Bond Market ETF (BND) and SPDR S&P 500 ETF Trust (SPY) trade together? Their weekly returns over three years give a correlation of 0.18, which is weak.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are BND and SPY?
On 3 years of weekly data the BND/SPY correlation comes out at 0.18, weak. The past 12 months show a tighter link (0.33) than the 3-year average (0.18). The 5-year figure is 0.27, and annualized covariance runs at 13.4 %².
Within BND's tracked universe of 33 assets, SPY comes in at #19 by 3-year correlation. Correlation aside, the last 12 months split them widely, with SPY ahead by 18.3 points (+2.3% versus +20.6%). This link changes with the market regime, having swung between -0.30 and 0.59 on a rolling one-year basis. Note the risk asymmetry: SPY runs 2.8 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.
BND vs SPY: side by side
| BND (Vanguard Total Bond Market ETF) | SPY (SPDR S&P 500 ETF Trust) | |
|---|---|---|
| 1-year return | +2.3% | +20.6% |
| 5-year return | -1.3% | +82.4% |
| Volatility (ann.) | 5.2% | 14.5% |
| Beta vs S&P 500 | 0.06 | 1.00 |
| Max drawdown (3Y) | -4.7% | -18.8% |
| Dividend yield | – | 1.01% |
| Expense ratio | – | 0.09% |
| Assets under management | – | $795.3B |
| Sector / category | ETF · Bonds | ETF · US Large Cap |
SPY is a Large Blend fund from State Street Investment Management: $795.3B under management, 504 holdings, a 0.09% expense ratio, a 1.01% trailing dividend yield.
Year-by-year returns
| Year | BND | SPY |
|---|---|---|
| 2022 | -13.1% | -18.2% |
| 2023 | +5.7% | +26.2% |
| 2024 | +1.4% | +24.9% |
| 2025 | +7.1% | +17.7% |
| 2026 | +0.2% | +13.7% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are BND and SPY good diversifiers for each other?
By historical standards, yes. A correlation of 0.18 means the two rarely move for the same reasons.
FAQ
What is the correlation between BND and SPY?
The BND/SPY correlation stands at 0.18 on a 3-year window (1 year: 0.33, 5 years: 0.27), computed from weekly returns as of 2026-08-27.
Is SPY a good diversifier for BND?
By historical standards, yes. A correlation of 0.18 means the two rarely move for the same reasons.
What does a correlation of 0.18 mean?
Correlation ranges from −1 to +1. Values near +1 mean two assets move together, near 0 that they move independently, and negative values that they tend to move in opposite directions. It measures co-movement, not performance.
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Related comparisons
Hubs: BND correlations · SPY correlations
