SHY vs TLT: Correlation
How closely do iShares 1-3 Year Treasury Bond ETF (SHY) and iShares 20+ Year Treasury Bond ETF (TLT) trade together? Their weekly returns over three years give a correlation of 0.72, which is strong.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are SHY and TLT?
Across a 3-year window, the weekly returns of SHY and TLT correlate at 0.72, strong. Recent behaviour matches the longer record: 0.67 over 1 year against 0.72 over 3. Stretching to 5 years gives 0.62, with an annualized covariance of 15.1 %².
By 3-year correlation, TLT places #6 of the 62 assets tracked against SHY. Twelve-month performance is nearly a tie, at +2.5% for SHY and +0.3% for TLT. Across three years, the rolling one-year figure varied moderately, from 0.52 to 0.83. One caveat on sizing: TLT is 8.4 times as volatile as the other leg, so an equal-dollar split is far from equal-risk.
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 TLT: side by side
| SHY (iShares 1-3 Year Treasury Bond ETF) | TLT (iShares 20+ Year Treasury Bond ETF) | |
|---|---|---|
| 1-year return | +2.5% | +0.3% |
| 5-year return | +9.6% | -34.0% |
| Volatility (ann.) | 1.6% | 13.5% |
| Beta vs S&P 500 | 0.00 | 0.11 |
| Max drawdown (3Y) | -1.0% | -14.8% |
| Dividend yield | 3.65% | 4.75% |
| Expense ratio | 0.15% | 0.15% |
| Assets under management | $25.1B | $41.5B |
| Sector / category | ETF · Bonds | ETF · Bonds |
SHY is a Short Government fund from iShares: $25.1B under management, a 0.15% expense ratio, a 3.65% trailing dividend yield. On the fund side, TLT sits in the Long Government category at iShares, with $41.5B under management, a 0.15% expense ratio, a 4.75% trailing dividend yield.
Year-by-year returns
| Year | SHY | TLT |
|---|---|---|
| 2022 | -3.9% | -31.2% |
| 2023 | +4.2% | +2.8% |
| 2024 | +3.9% | -8.1% |
| 2025 | +5.0% | +4.2% |
| 2026 | +1.1% | -2.1% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are SHY and TLT good diversifiers for each other?
To a limited degree. At 0.72 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 TLT?
The SHY/TLT correlation stands at 0.72 on a 3-year window (1 year: 0.67, 5 years: 0.62), computed from weekly returns as of 2026-08-27.
Is TLT a good diversifier for SHY?
To a limited degree. At 0.72 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 0.72 mean?
A reading of 0.72 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-tlt.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/shy-vs-tlt/)
The core API is free. Terms and every endpoint in the API documentation.
Related comparisons
Hubs: SHY correlations · TLT correlations
