ESS vs VNQ: Correlation
How closely do Essex Property Trust (ESS) and Vanguard Real Estate ETF (VNQ) trade together? Their weekly returns over three years give a correlation of 0.74, which is strong.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are ESS and VNQ?
On 3 years of weekly data the ESS/VNQ correlation comes out at 0.74, strong. Little has changed lately, as the 1-year reading of 0.67 lands near the 3-year figure. The 5-year figure is 0.76, and annualized covariance runs at 271.8 %².
Within ESS's tracked universe of 31 assets, VNQ comes in at #6 by 3-year correlation. Neither side won the trailing year by much: +9.1% against +10.3%. The rolling one-year correlation stayed in a tight band between 0.64 and 0.84 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.
ESS vs VNQ: side by side
| ESS (Essex Property Trust) | VNQ (Vanguard Real Estate ETF) | |
|---|---|---|
| 1-year return | +9.1% | +10.3% |
| 5-year return | +3.0% | +9.5% |
| Volatility (ann.) | 22.2% | 16.6% |
| Beta vs S&P 500 | 0.64 | 0.59 |
| Max drawdown (3Y) | -20.8% | -17.5% |
| Market cap | $19.4B | – |
| P/E (trailing) | 44.8 | – |
| Dividend yield | 3.58% | 3.51% |
| Expense ratio | – | 0.13% |
| Assets under management | – | $73.1B |
| Sector / category | Real Estate | ETF · Real Estate |
VNQ is a Real Estate fund from Vanguard: $73.1B under management, 140 holdings, a 0.13% expense ratio, a 3.51% trailing dividend yield.
Year-by-year returns
| Year | ESS | VNQ |
|---|---|---|
| 2022 | -37.8% | -26.3% |
| 2023 | +22.0% | +11.9% |
| 2024 | +18.4% | +4.8% |
| 2025 | -5.0% | +3.2% |
| 2026 | +10.5% | +12.5% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Fund exposure
Keep in mind that VNQ holds ESS at a 0.96% weight, which makes a slice of this correlation mechanical rather than coincidental.
Are ESS and VNQ good diversifiers for each other?
To a limited degree. At 0.74 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
FAQ
What is the correlation between ESS and VNQ?
The ESS/VNQ correlation stands at 0.74 on a 3-year window (1 year: 0.67, 5 years: 0.76), computed from weekly returns as of 2026-08-27.
Is VNQ a good diversifier for ESS?
To a limited degree. At 0.74 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
What does a correlation of 0.74 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.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/ess-vs-vnq.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/ess-vs-vnq/)
Free with attribution; caching and terms are described in the API documentation.
Related comparisons
Hubs: ESS correlations · VNQ correlations
