SHY vs TIP: Correlation
Measured on weekly returns over the past three years, iShares 1-3 Year Treasury Bond ETF (SHY) and iShares TIPS Bond ETF (TIP) carry a correlation of 0.78, a strong link.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are SHY and TIP?
On 3 years of weekly data the SHY/TIP correlation comes out at 0.78, strong. Little has changed lately, as the 1-year reading of 0.77 lands near the 3-year figure. The 5-year figure is 0.66, and annualized covariance runs at 5.3 %².
By 3-year correlation, TIP places #4 of the 62 assets tracked against SHY. Their 12-month results are close: +2.5% for SHY against +1.4% for TIP. The rolling one-year correlation moved between 0.56 and 0.89 over the past three years, a moderate range. Note the risk asymmetry: TIP runs 2.8 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.
SHY vs TIP: side by side
| SHY (iShares 1-3 Year Treasury Bond ETF) | TIP (iShares TIPS Bond ETF) | |
|---|---|---|
| 1-year return | +2.5% | +1.4% |
| 5-year return | +9.6% | +1.2% |
| Volatility (ann.) | 1.6% | 4.4% |
| Beta vs S&P 500 | 0.00 | 0.05 |
| Max drawdown (3Y) | -1.0% | -3.7% |
| Dividend yield | 3.65% | 4.47% |
| Expense ratio | 0.15% | 0.18% |
| Assets under management | $25.1B | $14.6B |
| Sector / category | ETF · Bonds | ETF · Bonds |
SHY, iShares's Short Government fund, carries $25.1B under management, a 0.15% expense ratio, a 3.65% 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 | SHY | TIP |
|---|---|---|
| 2022 | -3.9% | -12.3% |
| 2023 | +4.2% | +3.8% |
| 2024 | +3.9% | +1.7% |
| 2025 | +5.0% | +6.8% |
| 2026 | +1.1% | +1.1% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are SHY and TIP good diversifiers for each other?
To a limited degree. At 0.78 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
FAQ
What is the correlation between SHY and TIP?
As of 2026-08-27, the correlation of weekly returns between SHY and TIP is 0.78 over 3 years, 0.77 over 1 year and 0.66 over 5 years.
Is TIP a good diversifier for SHY?
To a limited degree. At 0.78 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
What does a correlation of 0.78 mean?
A reading of 0.78 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/shy-vs-tip.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/shy-vs-tip/)
Free with attribution; caching and terms are described in the API documentation.
Related comparisons
Hubs: SHY correlations · TIP correlations
