SHY vs SPY: Correlation
Measured on weekly returns over the past three years, iShares 1-3 Year Treasury Bond ETF (SHY) and SPDR S&P 500 ETF Trust (SPY) carry a correlation of 0.03, a near-zero link.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are SHY and SPY?
Over the past 3 years, SHY and SPY moved with a correlation of 0.03, which is near zero, meaning they move largely independently. The link has tightened recently: the 1-year correlation (0.21) runs above the 3-year figure (0.03). Over 5 years the correlation is 0.14, and the annualized covariance of weekly returns is 0.6 %².
Among the 62 assets we track against SHY, SPY ranks #16 by 3-year correlation. Their recent paths diverged sharply: over the last 12 months SPY outperformed by 18.1 percentage points (+2.5% for SHY against +20.6% for SPY). The relationship is regime-dependent: the rolling one-year correlation swung between -0.48 and 0.40 over the past three years, so this pair behaves very differently depending on the market environment. Risk is not evenly split, since SPY carries 9.1 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.
SHY vs SPY: side by side
| SHY (iShares 1-3 Year Treasury Bond ETF) | SPY (SPDR S&P 500 ETF Trust) | |
|---|---|---|
| 1-year return | +2.5% | +20.6% |
| 5-year return | +9.6% | +82.4% |
| Volatility (ann.) | 1.6% | 14.5% |
| Beta vs S&P 500 | 0.00 | 1.00 |
| Max drawdown (3Y) | -1.0% | -18.8% |
| Dividend yield | 3.65% | 1.01% |
| Expense ratio | 0.15% | 0.09% |
| Assets under management | $25.1B | $795.3B |
| Sector / category | ETF · Bonds | ETF · US Large Cap |
SHY is a Short Government fund from iShares: $25.1B under management, a 0.15% expense ratio, a 3.65% 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 | SHY | SPY |
|---|---|---|
| 2022 | -3.9% | -18.2% |
| 2023 | +4.2% | +26.2% |
| 2024 | +3.9% | +24.9% |
| 2025 | +5.0% | +17.7% |
| 2026 | +1.1% | +13.7% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are SHY and SPY good diversifiers for each other?
Yes. With a correlation of 0.03, SHY and SPY have moved largely independently, which makes them a genuinely diversifying pair by historical standards.
FAQ
What is the correlation between SHY and SPY?
As of 2026-08-27, the correlation of weekly returns between SHY and SPY is 0.03 over 3 years, 0.21 over 1 year and 0.14 over 5 years.
Is SPY a good diversifier for SHY?
Yes. With a correlation of 0.03, SHY and SPY have moved largely independently, which makes them a genuinely diversifying pair by historical standards.
What does a correlation of 0.03 mean?
A reading of 0.03 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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