EWJ vs IEMG: Correlation & Overlap
How closely do iShares MSCI Japan ETF (EWJ) and iShares Core MSCI Emerging Markets ETF (IEMG) trade together? Their weekly returns over three years give a correlation of 0.72, which is strong. By holdings, the two funds overlap 0.3% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are EWJ and IEMG?
Over the past 3 years, EWJ and IEMG moved with a correlation of 0.72, which is strong. Recent behaviour matches the longer record: 0.80 over 1 year against 0.72 over 3. Over 5 years the correlation is 0.73, and the annualized covariance of weekly returns is 247.6 %².
Within EWJ's tracked universe of 70 assets, IEMG comes in at #10 by 3-year correlation. On 12-month performance IEMG holds a 8.9-point edge, +27.1% against +36.0%. On a rolling one-year basis the correlation drifted between 0.54 and 0.81, a moderate band.
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.
EWJ vs IEMG: side by side
| EWJ (iShares MSCI Japan ETF) | IEMG (iShares Core MSCI Emerging Markets ETF) | |
|---|---|---|
| 1-year return | +27.1% | +36.0% |
| 5-year return | +58.6% | +50.7% |
| Volatility (ann.) | 19.6% | 17.4% |
| Beta vs S&P 500 | 0.94 | 0.84 |
| Max drawdown (3Y) | -14.7% | -17.2% |
| Dividend yield | 3.86% | 2.31% |
| Expense ratio | 0.49% | 0.09% |
| Assets under management | $21.8B | $152.2B |
| Sector / category | ETF · International | ETF · International |
EWJ, iShares's Japan Stock fund, carries $21.8B under management, 168 holdings, a 0.49% expense ratio, a 3.86% trailing dividend yield. IEMG, iShares's Diversified Emerging Mkts fund, carries $152.2B under management, 1824 holdings, a 0.09% expense ratio, a 2.31% trailing dividend yield.
Portfolio overlap between EWJ and IEMG
The two portfolios are largely distinct. Weighing the shared positions, 0.3% of the two funds is identical, spread across 8 common holdings. That shared book is a large part of why the returns line up.
| Common holding | Weight in EWJ | Weight in IEMG |
|---|---|---|
| 1801 | 0.22% | 0.14% |
| 2801 | 0.15% | 0.04% |
| 1605 | 0.40% | 0.03% |
| 7203 | 3.47% | 0.03% |
| 4004 | 0.34% | 0.01% |
| 1802 | 0.22% | 0.01% |
| 6098 | 2.71% | 0.01% |
| 7202 | 0.14% | 0.01% |
Largest positions held only by EWJ: 8306 (4.56%), 6857 (3.12%), 8035 (2.97%), 8316 (2.92%), 6501 (2.80%). Only by IEMG: 2330 (13.28%), 005930 (6.27%), 000660 (4.78%), 700 (2.49%), 9988 (1.77%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26. Top 8 common positions shown.
Year-by-year returns
| Year | EWJ | IEMG |
|---|---|---|
| 2022 | -17.7% | -20.0% |
| 2023 | +20.3% | +11.5% |
| 2024 | +7.0% | +6.5% |
| 2025 | +25.8% | +32.6% |
| 2026 | +19.3% | +23.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are EWJ and IEMG good diversifiers for each other?
Only partially. A correlation of 0.72 means EWJ and IEMG 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 EWJ and IEMG?
Using weekly returns as of 2026-08-27: 0.72 over 3 years, with 0.80 over the last year and 0.73 over 5 years.
Is IEMG a good diversifier for EWJ?
Only partially. A correlation of 0.72 means EWJ and IEMG share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
How much do EWJ and IEMG overlap?
Per the issuers' own portfolio disclosures (2026-08-26), the overlap is 0.3% by weight over 8 common positions.
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Related comparisons
Hubs: EWJ correlations · IEMG correlations
