EFA vs EWJ: Correlation & Overlap
Measured on weekly returns over the past three years, iShares MSCI EAFE ETF (EFA) and iShares MSCI Japan ETF (EWJ) carry a correlation of 0.87, a very strong link. Looking through to holdings, 23.2% of the two portfolios is the same by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are EFA and EWJ?
Across a 3-year window, the weekly returns of EFA and EWJ correlate at 0.87, very strong, meaning they move nearly in lockstep. The relationship has been stable: the 1-year correlation (0.85) sits close to the 3-year figure. Stretching to 5 years gives 0.85, with an annualized covariance of 254.4 %².
Within EFA's tracked universe of 109 assets, EWJ comes in at #5 by 3-year correlation. Over the last 12 months EWJ came out ahead by 5.2 percentage points (+21.9% against +27.1%). The rolling one-year correlation stayed in a tight band between 0.77 and 0.93 over the past three years, which points to a structural rather than episodic relationship.
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.
EFA vs EWJ: side by side
| EFA (iShares MSCI EAFE ETF) | EWJ (iShares MSCI Japan ETF) | |
|---|---|---|
| 1-year return | +21.9% | +27.1% |
| 5-year return | +56.7% | +58.6% |
| Volatility (ann.) | 14.9% | 19.6% |
| Beta vs S&P 500 | 0.77 | 0.94 |
| Max drawdown (3Y) | -14.1% | -14.7% |
| Dividend yield | 3.19% | 3.86% |
| Expense ratio | 0.32% | 0.49% |
| Assets under management | $78.0B | $21.8B |
| Sector / category | ETF · International | ETF · International |
EFA is a Foreign Large Blend fund from iShares: $78.0B under management, 666 holdings, a 0.32% expense ratio, a 3.19% trailing dividend yield. EWJ, iShares's Japan Stock fund, carries $21.8B under management, 168 holdings, a 0.49% expense ratio, a 3.86% trailing dividend yield.
Portfolio overlap between EFA and EWJ
The two portfolios partially overlap: 23.2% of the funds' weight sits in the same underlying holdings (168 common positions). Correlation tells you they move together; overlap tells you why.
| Common holding | Weight in EFA | Weight in EWJ |
|---|---|---|
| 8306 | 1.06% | 4.56% |
| 7203 | 0.81% | 3.47% |
| 6857 | 0.72% | 3.12% |
| 8035 | 0.69% | 2.97% |
| 8316 | 0.68% | 2.92% |
| 6501 | 0.65% | 2.80% |
| 6098 | 0.63% | 2.71% |
| 6758 | 0.63% | 2.70% |
| 8411 | 0.54% | 2.35% |
| 9984 | 0.53% | 2.29% |
| 285A | 0.44% | 1.87% |
| 6861 | 0.42% | 1.83% |
| 8058 | 0.39% | 1.70% |
| 9983 | 0.38% | 1.64% |
| 8766 | 0.38% | 1.63% |
Largest positions held only by EFA: ASML (2.99%), HSBA (1.57%), ROP (1.42%), SAN (1.38%), NOVN (1.28%). Only by EWJ: .
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26. Top 15 common positions shown.
Year-by-year returns
| Year | EFA | EWJ |
|---|---|---|
| 2022 | -14.4% | -17.7% |
| 2023 | +18.4% | +20.3% |
| 2024 | +3.5% | +7.0% |
| 2025 | +31.5% | +25.8% |
| 2026 | +14.3% | +19.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are EFA and EWJ good diversifiers for each other?
No. With a correlation of 0.87, EFA and EWJ move nearly in lockstep, so holding both adds very little diversification.
FAQ
What is the correlation between EFA and EWJ?
Using weekly returns as of 2026-08-27: 0.87 over 3 years, with 0.85 over the last year and 0.85 over 5 years.
Is EWJ a good diversifier for EFA?
No. With a correlation of 0.87, EFA and EWJ move nearly in lockstep, so holding both adds very little diversification.
How much do EFA and EWJ overlap?
Per the issuers' own portfolio disclosures (2026-08-26), the overlap is 23.2% by weight over 168 common positions.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/efa-vs-ewj.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/efa-vs-ewj/)
Free with attribution; caching and terms are described in the API documentation.
Related comparisons
Hubs: EFA correlations · EWJ correlations
