LQD vs SPY: Correlation
Measured on weekly returns over the past three years, iShares iBoxx Investment Grade Corporate Bond ETF (LQD) and SPDR S&P 500 ETF Trust (SPY) carry a correlation of 0.30, a moderate link.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are LQD and SPY?
On 3 years of weekly data the LQD/SPY correlation comes out at 0.30, moderate. The past 12 months show a tighter link (0.42) than the 3-year average (0.30). The 5-year figure is 0.41, and annualized covariance runs at 31.6 %².
By 3-year correlation, SPY places #21 of the 33 assets tracked against LQD. Their recent paths diverged sharply: over the last 12 months SPY outperformed by 19.1 percentage points (+1.5% for LQD against +20.6% for SPY). This link changes with the market regime, having swung between -0.08 and 0.62 on a rolling one-year basis. Risk is not evenly split, since SPY carries 2.0 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.
LQD vs SPY: side by side
| LQD (iShares iBoxx Investment Grade Corporate Bond ETF) | SPY (SPDR S&P 500 ETF Trust) | |
|---|---|---|
| 1-year return | +1.5% | +20.6% |
| 5-year return | -4.1% | +82.4% |
| Volatility (ann.) | 7.3% | 14.5% |
| Beta vs S&P 500 | 0.15 | 1.00 |
| Max drawdown (3Y) | -6.7% | -18.8% |
| Dividend yield | 4.66% | 1.01% |
| Expense ratio | 0.14% | 0.09% |
| Assets under management | $33.0B | $795.3B |
| Sector / category | ETF · Bonds | ETF · US Large Cap |
On the fund side, LQD sits in the Corporate Bond category at iShares, with $33.0B under management, a 0.14% expense ratio, a 4.66% 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 | LQD | SPY |
|---|---|---|
| 2022 | -17.9% | -18.2% |
| 2023 | +9.4% | +26.2% |
| 2024 | +0.9% | +24.9% |
| 2025 | +7.9% | +17.7% |
| 2026 | -0.5% | +13.7% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are LQD and SPY good diversifiers for each other?
Yes, to a useful degree: a correlation of 0.30 leaves real independence between the two, which historically damped combined volatility.
FAQ
What is the correlation between LQD and SPY?
As of 2026-08-27, the correlation of weekly returns between LQD and SPY is 0.30 over 3 years, 0.42 over 1 year and 0.41 over 5 years.
Is SPY a good diversifier for LQD?
Yes, to a useful degree: a correlation of 0.30 leaves real independence between the two, which historically damped combined volatility.
What does a correlation of 0.30 mean?
On the −1 to +1 scale, 0.30 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.
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Hubs: LQD correlations · SPY correlations
