IBB vs VNQ: Correlation & Overlap
How closely do iShares Biotechnology ETF (IBB) and Vanguard Real Estate ETF (VNQ) trade together? Their weekly returns over three years give a correlation of 0.54, which is moderate. By holdings, the two funds overlap 0% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are IBB and VNQ?
Over the past 3 years, IBB and VNQ moved with a correlation of 0.54, which is moderate. Lately the two have drifted apart, with the 1-year correlation at 0.28 versus 0.54 over 3 years. Over 5 years the correlation is 0.59, and the annualized covariance of weekly returns is 184.5 %².
By 3-year correlation, VNQ places #72 of the 168 assets tracked against IBB. Correlation aside, the last 12 months split them widely, with IBB ahead by 45.1 points (+55.4% versus +10.3%). The relationship is regime-dependent: the rolling one-year correlation swung between 0.30 and 0.83 over the past three years, so this pair behaves very differently depending on the market environment.
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.
IBB vs VNQ: side by side
| IBB (iShares Biotechnology ETF) | VNQ (Vanguard Real Estate ETF) | |
|---|---|---|
| 1-year return | +55.4% | +10.3% |
| 5-year return | +26.6% | +9.5% |
| Volatility (ann.) | 20.7% | 16.6% |
| Beta vs S&P 500 | 0.81 | 0.59 |
| Max drawdown (3Y) | -24.9% | -17.5% |
| Dividend yield | 0.22% | 3.51% |
| Expense ratio | 0.44% | 0.13% |
| Assets under management | $9.2B | $73.1B |
| Sector / category | ETF · Thematic | ETF · Real Estate |
On the fund side, IBB sits in the Health category at iShares, with $9.2B under management, 235 holdings, a 0.44% expense ratio, a 0.22% trailing dividend yield. 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.
Portfolio overlap between IBB and VNQ
The two portfolios are largely distinct: 0% of the funds' weight sits in the same underlying holdings (0 common positions). Correlation tells you they move together; overlap tells you why.
Largest positions held only by IBB: AMGN (8.43%), VRTX (7.89%), GILD (7.10%), REGN (5.68%), MRNA (3.76%). Only by VNQ: VRTPX (14.54%), WELL (8.54%), PLD (7.04%), EQIX (5.25%), AMT (4.22%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26.
Year-by-year returns
| Year | IBB | VNQ |
|---|---|---|
| 2022 | -13.7% | -26.3% |
| 2023 | +3.8% | +11.9% |
| 2024 | -2.4% | +4.8% |
| 2025 | +28.0% | +3.2% |
| 2026 | +27.4% | +12.5% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are IBB and VNQ good diversifiers for each other?
Only partially. A correlation of 0.54 means IBB and VNQ 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 IBB and VNQ?
As of 2026-08-27, the correlation of weekly returns between IBB and VNQ is 0.54 over 3 years, 0.28 over 1 year and 0.59 over 5 years.
Is VNQ a good diversifier for IBB?
Only partially. A correlation of 0.54 means IBB and VNQ share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
How much do IBB and VNQ overlap?
Per the issuers' own portfolio disclosures (2026-08-26), the overlap is 0% by weight over 0 common positions.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/ibb-vs-vnq.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/ibb-vs-vnq/)
Free with attribution; caching and terms are described in the API documentation.
Related comparisons
Hubs: IBB correlations · VNQ correlations
