SMH vs TSM: Correlation
How closely do VanEck Semiconductor ETF (SMH) and Taiwan Semiconductor Manufacturing Company Ltd. (TSM) 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 TSM?
Across a 3-year window, the weekly returns of SMH and TSM correlate at 0.82, very strong, meaning they move nearly in lockstep. Recent behaviour matches the longer record: 0.78 over 1 year against 0.82 over 3. Stretching to 5 years gives 0.81, with an annualized covariance of 965.4 %².
Among the 88 assets we track against SMH, TSM ranks #12 by 3-year correlation. The trailing year gives SMH the advantage: +93.1% versus +80.5%, a 12.6-point spread.
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 TSM: side by side
| SMH (VanEck Semiconductor ETF) | TSM (Taiwan Semiconductor Manufacturing Company Ltd.) | |
|---|---|---|
| 1-year return | +93.1% | +80.5% |
| 5-year return | +332.8% | +289.6% |
| Volatility (ann.) | 33.7% | 34.9% |
| Beta vs S&P 500 | 1.91 | 1.59 |
| Max drawdown (3Y) | -35.7% | -36.8% |
| Market cap | – | $2,216.2B |
| P/E (trailing) | – | 31.1 |
| Dividend yield | – | 6.22% |
| Sector / category | ETF · Thematic | US Listed |
Year-by-year returns
| Year | SMH | TSM |
|---|---|---|
| 2022 | -33.5% | -36.7% |
| 2023 | +73.4% | +42.3% |
| 2024 | +39.1% | +92.6% |
| 2025 | +49.2% | +55.9% |
| 2026 | +59.1% | +41.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are SMH and TSM good diversifiers for each other?
No. With a correlation of 0.82, SMH and TSM move nearly in lockstep, so holding both adds very little diversification.
FAQ
What is the correlation between SMH and TSM?
As of 2026-08-27, the correlation of weekly returns between SMH and TSM is 0.82 over 3 years, 0.78 over 1 year and 0.81 over 5 years.
Is TSM a good diversifier for SMH?
No. With a correlation of 0.82, SMH and TSM move nearly in lockstep, so holding both adds very little diversification.
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.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/smh-vs-tsm.json
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[](https://www.pairbook.io/pair/smh-vs-tsm/)
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Related comparisons
Hubs: SMH correlations · TSM correlations
