EEM vs QUAL: Correlation & Overlap
Measured on weekly returns over the past three years, iShares MSCI Emerging Markets ETF (EEM) and iShares MSCI USA Quality Factor ETF (QUAL) carry a correlation of 0.64, a strong link. The two funds also share 0.1% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are EEM and QUAL?
On 3 years of weekly data the EEM/QUAL correlation comes out at 0.64, strong. Little has changed lately, as the 1-year reading of 0.67 lands near the 3-year figure. The 5-year figure is 0.61, and annualized covariance runs at 161.6 %².
Within EEM's tracked universe of 67 assets, QUAL comes in at #28 by 3-year correlation. Their recent paths diverged sharply: over the last 12 months EEM outperformed by 18.4 percentage points (+38.1% for EEM against +19.7% for QUAL). The link looks structural: the rolling one-year correlation barely moved, holding between 0.55 and 0.78.
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.
EEM vs QUAL: side by side
| EEM (iShares MSCI Emerging Markets ETF) | QUAL (iShares MSCI USA Quality Factor ETF) | |
|---|---|---|
| 1-year return | +38.1% | +19.7% |
| 5-year return | +47.1% | +68.0% |
| Volatility (ann.) | 18.0% | 14.0% |
| Beta vs S&P 500 | 0.85 | 0.93 |
| Max drawdown (3Y) | -17.3% | -18.0% |
| Dividend yield | 1.73% | 0.86% |
| Expense ratio | 0.72% | 0.15% |
| Assets under management | $29.2B | $46.5B |
| Sector / category | ETF · International | ETF · US Style |
EEM is a Diversified Emerging Mkts fund from iShares: $29.2B under management, 968 holdings, a 0.72% expense ratio, a 1.73% trailing dividend yield. QUAL, iShares's Large Blend fund, carries $46.5B under management, 123 holdings, a 0.15% expense ratio, a 0.86% trailing dividend yield.
Portfolio overlap between EEM and QUAL
The two portfolios are largely distinct: 0.1% of the funds' weight sits in the same underlying holdings (1 common positions). Correlation tells you they move together; overlap tells you why.
| Common holding | Weight in EEM | Weight in QUAL |
|---|---|---|
| HAL | 0.07% | 0.09% |
Largest positions held only by EEM: 2330 (15.14%), 005930 (7.15%), 000660 (5.45%), 700 (2.83%), 9988 (2.02%). Only by QUAL: MSFT (7.51%), AAPL (6.62%), NVDA (6.00%), META (3.75%), LLY (3.72%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26. Top 1 common positions shown.
Year-by-year returns
| Year | EEM | QUAL |
|---|---|---|
| 2022 | -20.6% | -20.5% |
| 2023 | +8.9% | +30.9% |
| 2024 | +6.5% | +22.3% |
| 2025 | +34.0% | +12.7% |
| 2026 | +24.2% | +13.5% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are EEM and QUAL good diversifiers for each other?
Only partially. A correlation of 0.64 means EEM and QUAL share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
FAQ
What is the correlation between EEM and QUAL?
As of 2026-08-27, the correlation of weekly returns between EEM and QUAL is 0.64 over 3 years, 0.67 over 1 year and 0.61 over 5 years.
Is QUAL a good diversifier for EEM?
Only partially. A correlation of 0.64 means EEM and QUAL share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
How much do EEM and QUAL overlap?
Per the issuers' own portfolio disclosures (2026-08-26), the overlap is 0.1% by weight over 1 common positions.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/eem-vs-qual.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/eem-vs-qual/)
Free with attribution; caching and terms are described in the API documentation.
Related comparisons
Hubs: EEM correlations · QUAL correlations
