SMHB vs SPY: Correlation
How closely do ETRACS Monthly Pay 2x Leveraged Small Cap High Dividend ETN (SMHB) and SPDR S&P 500 ETF Trust (SPY) trade together? Their weekly returns over three years give a correlation of 0.52, which is moderate.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are SMHB and SPY?
On 3 years of weekly data the SMHB/SPY correlation comes out at 0.52, moderate. Recent behaviour matches the longer record: 0.50 over 1 year against 0.52 over 3. The 5-year figure is 0.66, and annualized covariance runs at 297.4 %².
Within SMHB's tracked universe of 58 assets, SPY comes in at #36 by 3-year correlation. Over the last 12 months SPY came out ahead by 13.2 percentage points (+7.4% against +20.6%). Note the risk asymmetry: SMHB runs 2.7 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.
SMHB vs SPY: side by side
| SMHB (ETRACS Monthly Pay 2x Leveraged Small Cap High Dividend ETN) | SPY (SPDR S&P 500 ETF Trust) | |
|---|---|---|
| 1-year return | +7.4% | +20.6% |
| 5-year return | -13.5% | +82.4% |
| Volatility (ann.) | 39.3% | 14.5% |
| Beta vs S&P 500 | 1.42 | 1.00 |
| Max drawdown (3Y) | -45.0% | -18.8% |
| Dividend yield | – | 1.01% |
| Expense ratio | – | 0.09% |
| Assets under management | – | $795.3B |
| Sector / category | US Listed | 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 | SMHB | SPY |
|---|---|---|
| 2022 | -36.0% | -18.2% |
| 2023 | +36.0% | +26.2% |
| 2024 | -15.8% | +24.9% |
| 2025 | -7.7% | +17.7% |
| 2026 | +22.1% | +13.7% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are SMHB and SPY good diversifiers for each other?
Only partially. A correlation of 0.52 means SMHB and SPY share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
FAQ
What is the correlation between SMHB and SPY?
As of 2026-08-27, the correlation of weekly returns between SMHB and SPY is 0.52 over 3 years, 0.50 over 1 year and 0.66 over 5 years.
Is SPY a good diversifier for SMHB?
Only partially. A correlation of 0.52 means SMHB and SPY share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
What does a correlation of 0.52 mean?
A reading of 0.52 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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Related comparisons
Hubs: SMHB correlations · SPY correlations
