IWM vs TAN: Correlation
How closely do iShares Russell 2000 ETF (IWM) and Invesco Solar ETF (TAN) trade together? Their weekly returns over three years give a correlation of 0.52, which is moderate.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are IWM and TAN?
Across a 3-year window, the weekly returns of IWM and TAN correlate at 0.52, moderate. The link has loosened recently: the 1-year correlation (0.37) runs below the 3-year figure (0.52). Stretching to 5 years gives 0.57, with an annualized covariance of 383.8 %².
Within IWM's tracked universe of 320 assets, TAN comes in at #212 by 3-year correlation. On 12-month performance IWM holds a 7.0-point edge, +28.4% against +21.4%. Do not treat this figure as fixed: across three years the rolling one-year correlation ranged all the way from 0.28 to 0.85. Note the risk asymmetry: TAN runs 1.9 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.
IWM vs TAN: side by side
| IWM (iShares Russell 2000 ETF) | TAN (Invesco Solar ETF) | |
|---|---|---|
| 1-year return | +28.4% | +21.4% |
| 5-year return | +41.5% | -41.9% |
| Volatility (ann.) | 19.8% | 37.4% |
| Beta vs S&P 500 | 1.06 | 1.04 |
| Max drawdown (3Y) | -27.5% | -55.4% |
| Dividend yield | 0.91% | – |
| Expense ratio | 0.19% | – |
| Assets under management | $80.1B | – |
| Sector / category | ETF · US Small & Mid Cap | ETF · Thematic |
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.
Year-by-year returns
| Year | IWM | TAN |
|---|---|---|
| 2022 | -20.5% | -5.2% |
| 2023 | +16.8% | -26.8% |
| 2024 | +11.4% | -37.6% |
| 2025 | +12.7% | +48.3% |
| 2026 | +22.3% | +1.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are IWM and TAN good diversifiers for each other?
Only partially. A correlation of 0.52 means IWM and TAN 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 TAN?
The IWM/TAN correlation stands at 0.52 on a 3-year window (1 year: 0.37, 5 years: 0.57), computed from weekly returns as of 2026-08-27.
Is TAN a good diversifier for IWM?
Only partially. A correlation of 0.52 means IWM and TAN share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
What does a correlation of 0.52 mean?
On the −1 to +1 scale, 0.52 describes how much the two returns move together: +1 is lockstep, 0 is independence, negative values mean opposite directions. It says nothing about which performed better.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/iwm-vs-tan.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/iwm-vs-tan/)
No key needed, free to use. Full endpoint list in the API documentation.
Related comparisons
Hubs: IWM correlations · TAN correlations
