SMH vs SPY: Correlation
How closely do VanEck Semiconductor ETF (SMH) and SPDR S&P 500 ETF Trust (SPY) trade together? Their weekly returns over three years give a correlation of 0.82, which is very strong.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are SMH and SPY?
Over the past 3 years, SMH and SPY moved with a correlation of 0.82, which is very strong, meaning they move nearly in lockstep. Little has changed lately, as the 1-year reading of 0.75 lands near the 3-year figure. Over 5 years the correlation is 0.80, and the annualized covariance of weekly returns is 398.2 %².
By 3-year correlation, SPY places #10 of the 88 assets tracked against SMH. Correlation aside, the last 12 months split them widely, with SMH ahead by 72.5 points (+93.1% versus +20.6%). The rolling one-year correlation stayed in a tight band between 0.70 and 0.90 over the past three years, which points to a structural rather than episodic relationship. Risk is not evenly split, since SMH carries 2.3 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.
SMH vs SPY: side by side
| SMH (VanEck Semiconductor ETF) | SPY (SPDR S&P 500 ETF Trust) | |
|---|---|---|
| 1-year return | +93.1% | +20.6% |
| 5-year return | +332.8% | +82.4% |
| Volatility (ann.) | 33.7% | 14.5% |
| Beta vs S&P 500 | 1.91 | 1.00 |
| Max drawdown (3Y) | -35.7% | -18.8% |
| Dividend yield | – | 1.01% |
| Expense ratio | – | 0.09% |
| Assets under management | – | $795.3B |
| Sector / category | ETF · Thematic | ETF · US Large Cap |
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 | SMH | SPY |
|---|---|---|
| 2022 | -33.5% | -18.2% |
| 2023 | +73.4% | +26.2% |
| 2024 | +39.1% | +24.9% |
| 2025 | +49.2% | +17.7% |
| 2026 | +59.1% | +13.7% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are SMH and SPY good diversifiers for each other?
Not really. At 0.82, the two trade almost as one position, and owning both buys little extra protection.
FAQ
What is the correlation between SMH and SPY?
The SMH/SPY correlation stands at 0.82 on a 3-year window (1 year: 0.75, 5 years: 0.80), computed from weekly returns as of 2026-08-27.
Is SPY a good diversifier for SMH?
Not really. At 0.82, the two trade almost as one position, and owning both buys little extra protection.
What does a correlation of 0.82 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: SMH correlations · SPY correlations
