IWM vs QQQ: Correlation & Overlap
How closely do iShares Russell 2000 ETF (IWM) and Invesco QQQ Trust (QQQ) trade together? Their weekly returns over three years give a correlation of 0.67, which is strong. 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 IWM and QQQ?
Across a 3-year window, the weekly returns of IWM and QQQ correlate at 0.67, strong. Recent behaviour matches the longer record: 0.68 over 1 year against 0.67 over 3. Stretching to 5 years gives 0.74, with an annualized covariance of 259.4 %².
Among the 320 assets we track against IWM, QQQ ranks #58 by 3-year correlation. Their 12-month results are close: +28.4% for IWM against +26.3% for QQQ. Across three years, the rolling one-year figure varied moderately, from 0.43 to 0.83.
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.
IWM vs QQQ: side by side
| IWM (iShares Russell 2000 ETF) | QQQ (Invesco QQQ Trust) | |
|---|---|---|
| 1-year return | +28.4% | +26.3% |
| 5-year return | +41.5% | +95.4% |
| Volatility (ann.) | 19.8% | 19.6% |
| Beta vs S&P 500 | 1.06 | 1.28 |
| Max drawdown (3Y) | -27.5% | -22.8% |
| Dividend yield | 0.91% | 0.44% |
| Expense ratio | 0.19% | 0.18% |
| Assets under management | $80.1B | $452.8B |
| Sector / category | ETF · US Small & Mid Cap | ETF · US Growth & Tech |
IWM is a Small Blend fund from iShares: $80.1B under management, 1757 holdings, a 0.19% expense ratio, a 0.91% trailing dividend yield. QQQ is a Large Growth fund from Invesco: $452.8B under management, 104 holdings, a 0.18% expense ratio, a 0.44% trailing dividend yield.
Portfolio overlap between IWM and QQQ
The two portfolios are largely distinct. Weighing the shared positions, 0% of the two funds is identical, spread across 0 common holdings. That shared book is a large part of why the returns line up.
Largest positions held only by IWM: MOGA (0.35%), UMBF (0.34%), CYTK (0.33%), GKOS (0.33%), EAT (0.33%). Only by QQQ: NVDA (8.15%), AAPL (7.39%), MSFT (5.93%), MU (4.69%), AMZN (4.50%).
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 | IWM | QQQ |
|---|---|---|
| 2022 | -20.5% | -32.6% |
| 2023 | +16.8% | +54.9% |
| 2024 | +11.4% | +25.6% |
| 2025 | +12.7% | +20.8% |
| 2026 | +22.3% | +17.7% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are IWM and QQQ good diversifiers for each other?
Only partially. A correlation of 0.67 means IWM and QQQ 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 IWM and QQQ?
Using weekly returns as of 2026-08-27: 0.67 over 3 years, with 0.68 over the last year and 0.74 over 5 years.
Is QQQ a good diversifier for IWM?
Only partially. A correlation of 0.67 means IWM and QQQ share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
How much do IWM and QQQ overlap?
0% by weight, across 0 common holdings, based on issuer-disclosed portfolios as of 2026-08-26.
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Hubs: IWM correlations · QQQ correlations
