LQD vs TIP: Correlation
iShares iBoxx Investment Grade Corporate Bond ETF (LQD) and iShares TIPS Bond ETF (TIP) show a very strong relationship: their 3-year correlation of weekly returns is 0.89.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are LQD and TIP?
On 3 years of weekly data the LQD/TIP correlation comes out at 0.89, very strong, meaning they move nearly in lockstep. Little has changed lately, as the 1-year reading of 0.82 lands near the 3-year figure. The 5-year figure is 0.74, and annualized covariance runs at 28.1 %².
By 3-year correlation, TIP places #5 of the 33 assets tracked against LQD. Neither side won the trailing year by much: +1.5% against +1.4%. The link looks structural: the rolling one-year correlation barely moved, holding between 0.74 and 0.93. Risk is not evenly split, since LQD carries 1.7 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 TIP: side by side
| LQD (iShares iBoxx Investment Grade Corporate Bond ETF) | TIP (iShares TIPS Bond ETF) | |
|---|---|---|
| 1-year return | +1.5% | +1.4% |
| 5-year return | -4.1% | +1.2% |
| Volatility (ann.) | 7.3% | 4.4% |
| Beta vs S&P 500 | 0.15 | 0.05 |
| Max drawdown (3Y) | -6.7% | -3.7% |
| Dividend yield | 4.66% | 4.47% |
| Expense ratio | 0.14% | 0.18% |
| Assets under management | $33.0B | $14.6B |
| Sector / category | ETF · Bonds | ETF · Bonds |
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. TIP is an Inflation-Protected Bond fund from iShares: $14.6B under management, a 0.18% expense ratio, a 4.47% trailing dividend yield.
Year-by-year returns
| Year | LQD | TIP |
|---|---|---|
| 2022 | -17.9% | -12.3% |
| 2023 | +9.4% | +3.8% |
| 2024 | +0.9% | +1.7% |
| 2025 | +7.9% | +6.8% |
| 2026 | -0.5% | +1.1% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are LQD and TIP good diversifiers for each other?
No: a correlation of 0.89 means LQD and TIP tend to fall together, which is precisely when diversification is supposed to help.
FAQ
What is the correlation between LQD and TIP?
Using weekly returns as of 2026-08-27: 0.89 over 3 years, with 0.82 over the last year and 0.74 over 5 years.
Is TIP a good diversifier for LQD?
No: a correlation of 0.89 means LQD and TIP tend to fall together, which is precisely when diversification is supposed to help.
What does a correlation of 0.89 mean?
A reading of 0.89 sits on a scale from −1 (opposite moves) through 0 (unrelated) to +1 (identical moves). Correlation captures direction, not magnitude or performance.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/lqd-vs-tip.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/lqd-vs-tip/)
Free with attribution; caching and terms are described in the API documentation.
Related comparisons
Hubs: LQD correlations · TIP correlations
