MSD vs QQQ: Correlation
Measured on weekly returns over the past three years, Morgan Stanley Emerging Markets Debt Fund, Inc. (MSD) and Invesco QQQ Trust (QQQ) carry a correlation of 0.42, a moderate link.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are MSD and QQQ?
Over the past 3 years, MSD and QQQ moved with a correlation of 0.42, which is moderate. The link has tightened recently: the 1-year correlation (0.55) runs above the 3-year figure (0.42). Over 5 years the correlation is 0.43, and the annualized covariance of weekly returns is 95.5 %².
Within MSD's tracked universe of 13 assets, QQQ comes in at #7 by 3-year correlation. Their recent paths diverged sharply: over the last 12 months QQQ outperformed by 20.5 percentage points (+5.8% for MSD against +26.3% for QQQ). Risk is not evenly split, since QQQ 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.
MSD vs QQQ: side by side
| MSD (Morgan Stanley Emerging Markets Debt Fund, Inc.) | QQQ (Invesco QQQ Trust) | |
|---|---|---|
| 1-year return | +5.8% | +26.3% |
| 5-year return | +22.9% | +95.4% |
| Volatility (ann.) | 11.6% | 19.6% |
| Beta vs S&P 500 | 0.40 | 1.28 |
| Max drawdown (3Y) | -12.8% | -22.8% |
| Market cap | $0.1B | – |
| P/E (trailing) | 6.9 | – |
| Dividend yield | 9.78% | 0.44% |
| Expense ratio | – | 0.18% |
| Assets under management | – | $452.8B |
| Sector / category | US Listed | ETF · US Growth & Tech |
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.
Year-by-year returns
| Year | MSD | QQQ |
|---|---|---|
| 2022 | -22.1% | -32.6% |
| 2023 | +19.2% | +54.9% |
| 2024 | +24.9% | +25.6% |
| 2025 | +5.6% | +20.8% |
| 2026 | +2.6% | +17.7% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are MSD and QQQ good diversifiers for each other?
Yes, to a useful degree: a correlation of 0.42 leaves real independence between the two, which historically damped combined volatility.
FAQ
What is the correlation between MSD and QQQ?
As of 2026-08-27, the correlation of weekly returns between MSD and QQQ is 0.42 over 3 years, 0.55 over 1 year and 0.43 over 5 years.
Is QQQ a good diversifier for MSD?
Yes, to a useful degree: a correlation of 0.42 leaves real independence between the two, which historically damped combined volatility.
What does a correlation of 0.42 mean?
Correlation ranges from −1 to +1. Values near +1 mean two assets move together, near 0 that they move independently, and negative values that they tend to move in opposite directions. It measures co-movement, not performance.
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Related comparisons
Hubs: MSD correlations · QQQ correlations
