MS vs VYM: Correlation
Morgan Stanley (MS) and Vanguard High Dividend Yield ETF (VYM) show a strong relationship: their 3-year correlation of weekly returns is 0.77.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are MS and VYM?
Across a 3-year window, the weekly returns of MS and VYM correlate at 0.77, strong. The link has loosened recently: the 1-year correlation (0.57) runs below the 3-year figure (0.77). Stretching to 5 years gives 0.73, with an annualized covariance of 269.5 %².
Within MS's tracked universe of 46 assets, VYM comes in at #6 by 3-year correlation. Their recent paths diverged sharply: over the last 12 months MS outperformed by 26.0 percentage points (+47.1% for MS against +21.1% for VYM). On a rolling one-year basis the correlation drifted between 0.57 and 0.88, a moderate band. Note the risk asymmetry: MS runs 2.3 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.
MS vs VYM: side by side
| MS (Morgan Stanley) | VYM (Vanguard High Dividend Yield ETF) | |
|---|---|---|
| 1-year return | +47.1% | +21.1% |
| 5-year return | +142.0% | +76.6% |
| Volatility (ann.) | 28.3% | 12.3% |
| Beta vs S&P 500 | 1.43 | 0.69 |
| Max drawdown (3Y) | -29.2% | -14.5% |
| Market cap | $337.5B | – |
| P/E (trailing) | 17.4 | – |
| Dividend yield | 1.94% | 2.24% |
| Expense ratio | – | 0.04% |
| Assets under management | – | $99.2B |
| Sector / category | Financials | 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 | MS | VYM |
|---|---|---|
| 2022 | -10.3% | -0.4% |
| 2023 | +13.9% | +6.6% |
| 2024 | +39.7% | +17.6% |
| 2025 | +45.2% | +15.4% |
| 2026 | +23.0% | +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 MS at a 0.96% weight, which makes a slice of this correlation mechanical rather than coincidental.
Are MS and VYM good diversifiers for each other?
Somewhat, no more. With 0.77 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between MS and VYM?
The MS/VYM correlation stands at 0.77 on a 3-year window (1 year: 0.57, 5 years: 0.73), computed from weekly returns as of 2026-08-27.
Is VYM a good diversifier for MS?
Somewhat, no more. With 0.77 correlation, most large moves hit both names, and the diversification benefit stays modest.
What does a correlation of 0.77 mean?
A reading of 0.77 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: MS correlations · VYM correlations
