ITW vs VYM: Correlation
Measured on weekly returns over the past three years, Illinois Tool Works (ITW) and Vanguard High Dividend Yield ETF (VYM) carry a correlation of 0.71, a strong link.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are ITW and VYM?
On 3 years of weekly data the ITW/VYM correlation comes out at 0.71, strong. Little has changed lately, as the 1-year reading of 0.63 lands near the 3-year figure. The 5-year figure is 0.73, and annualized covariance runs at 165.3 %².
By 3-year correlation, VYM places #4 of the 81 assets tracked against ITW. Over the last 12 months VYM came out ahead by 12.9 percentage points (+8.2% against +21.1%). The link looks structural: the rolling one-year correlation barely moved, holding between 0.63 and 0.81. Note the risk asymmetry: ITW runs 1.5 times the annualized volatility of the other leg, so equal-weighting the two is not an equal-risk position.
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.
ITW vs VYM: side by side
| ITW (Illinois Tool Works) | VYM (Vanguard High Dividend Yield ETF) | |
|---|---|---|
| 1-year return | +8.2% | +21.1% |
| 5-year return | +36.1% | +76.6% |
| Volatility (ann.) | 19.0% | 12.3% |
| Beta vs S&P 500 | 0.64 | 0.69 |
| Max drawdown (3Y) | -20.6% | -14.5% |
| Market cap | $80.2B | – |
| P/E (trailing) | 25.8 | – |
| Dividend yield | 2.26% | 2.24% |
| Expense ratio | – | 0.04% |
| Assets under management | – | $99.2B |
| Sector / category | Industrials | ETF · Dividend |
VYM, Vanguard's Large Value fund, carries $99.2B under management, 604 holdings, a 0.04% expense ratio, a 2.24% trailing dividend yield.
Year-by-year returns
| Year | ITW | VYM |
|---|---|---|
| 2022 | -8.5% | -0.4% |
| 2023 | +21.6% | +6.6% |
| 2024 | -1.0% | +17.6% |
| 2025 | -0.4% | +15.4% |
| 2026 | +15.8% | +15.9% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Fund exposure
Keep in mind that VYM holds ITW at a 0.34% weight, which makes a slice of this correlation mechanical rather than coincidental.
Are ITW and VYM good diversifiers for each other?
To a limited degree. At 0.71 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 ITW and VYM?
Using weekly returns as of 2026-08-27: 0.71 over 3 years, with 0.63 over the last year and 0.73 over 5 years.
Is VYM a good diversifier for ITW?
To a limited degree. At 0.71 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 0.71 mean?
A reading of 0.71 sits on a scale from −1 (opposite moves) through 0 (unrelated) to +1 (identical moves). Correlation captures direction, not magnitude or performance.
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Related comparisons
Hubs: ITW correlations · VYM correlations
