IEF vs SHY: Correlation
How closely do iShares 7-10 Year Treasury Bond ETF (IEF) and iShares 1-3 Year Treasury Bond ETF (SHY) trade together? Their weekly returns over three years give a correlation of 0.87, which is very strong.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are IEF and SHY?
On 3 years of weekly data the IEF/SHY correlation comes out at 0.87, very strong, meaning they move nearly in lockstep. Recent behaviour matches the longer record: 0.88 over 1 year against 0.87 over 3. The 5-year figure is 0.84, and annualized covariance runs at 8.8 %².
By 3-year correlation, SHY places #6 of the 48 assets tracked against IEF. Their 12-month results are close: +0.9% for IEF against +2.5% for SHY. Stability stands out here, with the rolling one-year correlation confined to 0.81 through 0.93. One caveat on sizing: IEF is 4.1 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.
IEF vs SHY: side by side
| IEF (iShares 7-10 Year Treasury Bond ETF) | SHY (iShares 1-3 Year Treasury Bond ETF) | |
|---|---|---|
| 1-year return | +0.9% | +2.5% |
| 5-year return | -7.9% | +9.6% |
| Volatility (ann.) | 6.5% | 1.6% |
| Beta vs S&P 500 | 0.04 | 0.00 |
| Max drawdown (3Y) | -6.9% | -1.0% |
| Dividend yield | 3.96% | 3.65% |
| Expense ratio | 0.15% | 0.15% |
| Assets under management | $47.2B | $25.1B |
| Sector / category | ETF · Bonds | ETF · Bonds |
IEF, iShares's Long Government fund, carries $47.2B under management, a 0.15% expense ratio, a 3.96% trailing dividend yield. SHY, iShares's Short Government fund, carries $25.1B under management, a 0.15% expense ratio, a 3.65% trailing dividend yield.
Year-by-year returns
| Year | IEF | SHY |
|---|---|---|
| 2022 | -15.2% | -3.9% |
| 2023 | +3.6% | +4.2% |
| 2024 | -0.6% | +3.9% |
| 2025 | +8.0% | +5.0% |
| 2026 | -0.8% | +1.1% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are IEF and SHY good diversifiers for each other?
Not really. At 0.87, the two trade almost as one position, and owning both buys little extra protection.
FAQ
What is the correlation between IEF and SHY?
The IEF/SHY correlation stands at 0.87 on a 3-year window (1 year: 0.88, 5 years: 0.84), computed from weekly returns as of 2026-08-27.
Is SHY a good diversifier for IEF?
Not really. At 0.87, the two trade almost as one position, and owning both buys little extra protection.
What does a correlation of 0.87 mean?
A reading of 0.87 sits on a scale from −1 (opposite moves) through 0 (unrelated) to +1 (identical moves). Correlation captures direction, not magnitude or performance.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/ief-vs-shy.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/ief-vs-shy/)
No key needed, free to use. Full endpoint list in the API documentation.
Related comparisons
Hubs: IEF correlations · SHY correlations
