HYG vs MDY: Correlation
Measured on weekly returns over the past three years, iShares iBoxx High Yield Corporate Bond ETF (HYG) and SPDR S&P MidCap 400 ETF (MDY) carry a correlation of 0.75, a strong link.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are HYG and MDY?
Across a 3-year window, the weekly returns of HYG and MDY correlate at 0.75, strong. Little has changed lately, as the 1-year reading of 0.78 lands near the 3-year figure. Stretching to 5 years gives 0.76, with an annualized covariance of 57.7 %².
Within HYG's tracked universe of 46 assets, MDY comes in at #6 by 3-year correlation. On 12-month performance MDY holds a 13.7-point edge, +4.6% against +18.3%. The link looks structural: the rolling one-year correlation barely moved, holding between 0.63 and 0.85. One caveat on sizing: MDY is 3.5 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 MDY: side by side
| HYG (iShares iBoxx High Yield Corporate Bond ETF) | MDY (SPDR S&P MidCap 400 ETF) | |
|---|---|---|
| 1-year return | +4.6% | +18.3% |
| 5-year return | +19.9% | +47.5% |
| Volatility (ann.) | 4.7% | 16.5% |
| Beta vs S&P 500 | 0.22 | 0.91 |
| Max drawdown (3Y) | -4.6% | -24.0% |
| Dividend yield | 5.94% | 1.02% |
| Expense ratio | 0.49% | 0.23% |
| Assets under management | $17.1B | $26.5B |
| Sector / category | ETF · Bonds | ETF · US Small & Mid Cap |
HYG is a High Yield Bond fund from iShares: $17.1B under management, a 0.49% expense ratio, a 5.94% trailing dividend yield. MDY, State Street Investment Management's Mid-Cap Blend fund, carries $26.5B under management, 400 holdings, a 0.23% expense ratio, a 1.02% trailing dividend yield.
Year-by-year returns
| Year | HYG | MDY |
|---|---|---|
| 2022 | -11.0% | -13.3% |
| 2023 | +11.5% | +16.1% |
| 2024 | +8.0% | +13.6% |
| 2025 | +8.6% | +7.2% |
| 2026 | +2.5% | +16.4% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are HYG and MDY good diversifiers for each other?
Somewhat, no more. With 0.75 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between HYG and MDY?
As of 2026-08-27, the correlation of weekly returns between HYG and MDY is 0.75 over 3 years, 0.78 over 1 year and 0.76 over 5 years.
Is MDY a good diversifier for HYG?
Somewhat, no more. With 0.75 correlation, most large moves hit both names, and the diversification benefit stays modest.
What does a correlation of 0.75 mean?
On the −1 to +1 scale, 0.75 describes how much the two returns move together: +1 is lockstep, 0 is independence, negative values mean opposite directions. It says nothing about which performed better.
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Related comparisons
Hubs: HYG correlations · MDY correlations
