HYG vs MSD: Correlation
How closely do iShares iBoxx High Yield Corporate Bond ETF (HYG) and Morgan Stanley Emerging Markets Debt Fund, Inc. (MSD) trade together? Their weekly returns over three years give a correlation of 0.68, which is strong.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are HYG and MSD?
On 3 years of weekly data the HYG/MSD correlation comes out at 0.68, strong. Little has changed lately, as the 1-year reading of 0.66 lands near the 3-year figure. The 5-year figure is 0.54, and annualized covariance runs at 37.1 %².
Among the 46 assets we track against HYG, MSD ranks #21 by 3-year correlation. Twelve-month performance is nearly a tie, at +4.6% for HYG and +5.8% for MSD. One caveat on sizing: MSD is 2.5 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 MSD: side by side
| HYG (iShares iBoxx High Yield Corporate Bond ETF) | MSD (Morgan Stanley Emerging Markets Debt Fund, Inc.) | |
|---|---|---|
| 1-year return | +4.6% | +5.8% |
| 5-year return | +19.9% | +22.9% |
| Volatility (ann.) | 4.7% | 11.6% |
| Beta vs S&P 500 | 0.22 | 0.40 |
| Max drawdown (3Y) | -4.6% | -12.8% |
| Market cap | – | $0.1B |
| P/E (trailing) | – | 6.9 |
| Dividend yield | 5.94% | 9.78% |
| Expense ratio | 0.49% | – |
| Assets under management | $17.1B | – |
| Sector / category | ETF · Bonds | US Listed |
HYG, iShares's High Yield Bond fund, carries $17.1B under management, a 0.49% expense ratio, a 5.94% trailing dividend yield.
Year-by-year returns
| Year | HYG | MSD |
|---|---|---|
| 2022 | -11.0% | -22.1% |
| 2023 | +11.5% | +19.2% |
| 2024 | +8.0% | +24.9% |
| 2025 | +8.6% | +5.6% |
| 2026 | +2.5% | +2.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are HYG and MSD good diversifiers for each other?
To a limited degree. At 0.68 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 HYG and MSD?
As of 2026-08-27, the correlation of weekly returns between HYG and MSD is 0.68 over 3 years, 0.66 over 1 year and 0.54 over 5 years.
Is MSD a good diversifier for HYG?
To a limited degree. At 0.68 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 0.68 mean?
On the −1 to +1 scale, 0.68 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.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/hyg-vs-msd.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/hyg-vs-msd/)
No key needed, free to use. Full endpoint list in the API documentation.
Related comparisons
Hubs: HYG correlations · MSD correlations
