HYG vs LQD: Correlation
iShares iBoxx High Yield Corporate Bond ETF (HYG) and iShares iBoxx Investment Grade Corporate Bond ETF (LQD) show a strong relationship: their 3-year correlation of weekly returns is 0.72.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are HYG and LQD?
Over the past 3 years, HYG and LQD moved with a correlation of 0.72, which is strong. Little has changed lately, as the 1-year reading of 0.75 lands near the 3-year figure. Over 5 years the correlation is 0.71, and the annualized covariance of weekly returns is 24.5 %².
Among the 46 assets we track against HYG, LQD ranks #17 by 3-year correlation. Neither side won the trailing year by much: +4.6% against +1.5%. The rolling one-year correlation moved between 0.43 and 0.83 over the past three years, a moderate range. One caveat on sizing: LQD is 1.6 times as volatile as the other leg, so an equal-dollar split is far from equal-risk.
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.
HYG vs LQD: side by side
| HYG (iShares iBoxx High Yield Corporate Bond ETF) | LQD (iShares iBoxx Investment Grade Corporate Bond ETF) | |
|---|---|---|
| 1-year return | +4.6% | +1.5% |
| 5-year return | +19.9% | -4.1% |
| Volatility (ann.) | 4.7% | 7.3% |
| Beta vs S&P 500 | 0.22 | 0.15 |
| Max drawdown (3Y) | -4.6% | -6.7% |
| Dividend yield | 5.94% | 4.66% |
| Expense ratio | 0.49% | 0.14% |
| Assets under management | $17.1B | $33.0B |
| Sector / category | ETF · Bonds | ETF · Bonds |
HYG, iShares's High Yield Bond fund, carries $17.1B under management, a 0.49% expense ratio, a 5.94% trailing dividend yield. LQD, iShares's Corporate Bond fund, carries $33.0B under management, a 0.14% expense ratio, a 4.66% trailing dividend yield.
Year-by-year returns
| Year | HYG | LQD |
|---|---|---|
| 2022 | -11.0% | -17.9% |
| 2023 | +11.5% | +9.4% |
| 2024 | +8.0% | +0.9% |
| 2025 | +8.6% | +7.9% |
| 2026 | +2.5% | -0.5% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are HYG and LQD good diversifiers for each other?
Only partially. A correlation of 0.72 means HYG and LQD 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 HYG and LQD?
Using weekly returns as of 2026-08-27: 0.72 over 3 years, with 0.75 over the last year and 0.71 over 5 years.
Is LQD a good diversifier for HYG?
Only partially. A correlation of 0.72 means HYG and LQD share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
What does a correlation of 0.72 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/hyg-vs-lqd.json
Embed this badge (it refreshes with the data), with attribution:
[](https://www.pairbook.io/pair/hyg-vs-lqd/)
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Related comparisons
Hubs: HYG correlations · LQD correlations
