SMHB vs VNQ: Correlation
Measured on weekly returns over the past three years, ETRACS Monthly Pay 2x Leveraged Small Cap High Dividend ETN (SMHB) and Vanguard Real Estate ETF (VNQ) carry a correlation of 0.75, a strong link.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are SMHB and VNQ?
Over the past 3 years, SMHB and VNQ moved with a correlation of 0.75, which is strong. Lately the two have drifted apart, with the 1-year correlation at 0.61 versus 0.75 over 3 years. Over 5 years the correlation is 0.76, and the annualized covariance of weekly returns is 489.0 %².
Among the 58 assets we track against SMHB, VNQ ranks #4 by 3-year correlation. Twelve-month performance is nearly a tie, at +7.4% for SMHB and +10.3% for VNQ. Note the risk asymmetry: SMHB runs 2.4 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 VNQ: side by side
| SMHB (ETRACS Monthly Pay 2x Leveraged Small Cap High Dividend ETN) | VNQ (Vanguard Real Estate ETF) | |
|---|---|---|
| 1-year return | +7.4% | +10.3% |
| 5-year return | -13.5% | +9.5% |
| Volatility (ann.) | 39.3% | 16.6% |
| Beta vs S&P 500 | 1.42 | 0.59 |
| Max drawdown (3Y) | -45.0% | -17.5% |
| Dividend yield | – | 3.51% |
| Expense ratio | – | 0.13% |
| Assets under management | – | $73.1B |
| Sector / category | US Listed | ETF · Real Estate |
VNQ is a Real Estate fund from Vanguard: $73.1B under management, 140 holdings, a 0.13% expense ratio, a 3.51% trailing dividend yield.
Year-by-year returns
| Year | SMHB | VNQ |
|---|---|---|
| 2022 | -36.0% | -26.3% |
| 2023 | +36.0% | +11.9% |
| 2024 | -15.8% | +4.8% |
| 2025 | -7.7% | +3.2% |
| 2026 | +22.1% | +12.5% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are SMHB and VNQ good diversifiers for each other?
Only partially. A correlation of 0.75 means SMHB and VNQ 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 VNQ?
As of 2026-08-27, the correlation of weekly returns between SMHB and VNQ is 0.75 over 3 years, 0.61 over 1 year and 0.76 over 5 years.
Is VNQ a good diversifier for SMHB?
Only partially. A correlation of 0.75 means SMHB and VNQ share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
What does a correlation of 0.75 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/smhb-vs-vnq.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/smhb-vs-vnq/)
Free with attribution; caching and terms are described in the API documentation.
Related comparisons
Hubs: SMHB correlations · VNQ correlations
