IEF vs SPY: Correlation
Measured on weekly returns over the past three years, iShares 7-10 Year Treasury Bond ETF (IEF) and SPDR S&P 500 ETF Trust (SPY) carry a correlation of 0.09, a near-zero link.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are IEF and SPY?
On 3 years of weekly data the IEF/SPY correlation comes out at 0.09, near zero, meaning they move largely independently. The past 12 months show a tighter link (0.25) than the 3-year average (0.09). The 5-year figure is 0.15, and annualized covariance runs at 8.0 %².
By 3-year correlation, SPY places #18 of the 48 assets tracked against IEF. Their recent paths diverged sharply: over the last 12 months SPY outperformed by 19.7 percentage points (+0.9% for IEF against +20.6% for SPY). This link changes with the market regime, having swung between -0.44 and 0.56 on a rolling one-year basis. Risk is not evenly split, since SPY carries 2.2 times the volatility of the other side.
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 SPY: side by side
| IEF (iShares 7-10 Year Treasury Bond ETF) | SPY (SPDR S&P 500 ETF Trust) | |
|---|---|---|
| 1-year return | +0.9% | +20.6% |
| 5-year return | -7.9% | +82.4% |
| Volatility (ann.) | 6.5% | 14.5% |
| Beta vs S&P 500 | 0.04 | 1.00 |
| Max drawdown (3Y) | -6.9% | -18.8% |
| Dividend yield | 3.96% | 1.01% |
| Expense ratio | 0.15% | 0.09% |
| Assets under management | $47.2B | $795.3B |
| Sector / category | ETF · Bonds | ETF · US Large Cap |
IEF, iShares's Long Government fund, carries $47.2B under management, a 0.15% expense ratio, a 3.96% trailing dividend yield. SPY is a Large Blend fund from State Street Investment Management: $795.3B under management, 504 holdings, a 0.09% expense ratio, a 1.01% trailing dividend yield.
Year-by-year returns
| Year | IEF | SPY |
|---|---|---|
| 2022 | -15.2% | -18.2% |
| 2023 | +3.6% | +26.2% |
| 2024 | -0.6% | +24.9% |
| 2025 | +8.0% | +17.7% |
| 2026 | -0.8% | +13.7% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are IEF and SPY good diversifiers for each other?
Yes: at 0.09, the two have gone their own ways historically, which is what genuine diversification looks like.
FAQ
What is the correlation between IEF and SPY?
The IEF/SPY correlation stands at 0.09 on a 3-year window (1 year: 0.25, 5 years: 0.15), computed from weekly returns as of 2026-08-27.
Is SPY a good diversifier for IEF?
Yes: at 0.09, the two have gone their own ways historically, which is what genuine diversification looks like.
What does a correlation of 0.09 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.
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Related comparisons
Hubs: IEF correlations · SPY correlations
