AA vs XLB: Correlation
How closely do Alcoa Corporation (AA) and Materials Select Sector SPDR Fund (XLB) trade together? Their weekly returns over three years give a correlation of 0.61, which is strong.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are AA and XLB?
On 3 years of weekly data the AA/XLB correlation comes out at 0.61, strong. The relationship has been stable: the 1-year correlation (0.51) sits close to the 3-year figure. The 5-year figure is 0.66, and annualized covariance runs at 522.5 %².
By 3-year correlation, XLB places #4 of the 12 assets tracked against AA. Correlation aside, the last 12 months split them widely, with AA ahead by 44.6 points (+62.2% versus +17.6%). One caveat on sizing: AA is 3.0 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.
AA vs XLB: side by side
| AA (Alcoa Corporation) | XLB (Materials Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +62.2% | +17.6% |
| 5-year return | +22.3% | +36.9% |
| Volatility (ann.) | 50.8% | 16.7% |
| Beta vs S&P 500 | 1.71 | 0.72 |
| Max drawdown (3Y) | -52.3% | -23.2% |
| Market cap | $13.5B | – |
| P/E (trailing) | 10.3 | – |
| Dividend yield | 0.80% | 1.68% |
| Expense ratio | – | 0.08% |
| Assets under management | – | $8.3B |
| Sector / category | US Listed | Sector ETF |
XLB is a Natural Resources fund from State Street Investment Management: $8.3B under management, 26 holdings, a 0.08% expense ratio, a 1.68% trailing dividend yield.
Year-by-year returns
| Year | AA | XLB |
|---|---|---|
| 2022 | -23.1% | -12.3% |
| 2023 | -24.3% | +12.5% |
| 2024 | +12.4% | +0.1% |
| 2025 | +42.5% | +9.9% |
| 2026 | -3.2% | +18.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are AA and XLB good diversifiers for each other?
Only partially. A correlation of 0.61 means AA and XLB 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 AA and XLB?
As of 2026-08-27, the correlation of weekly returns between AA and XLB is 0.61 over 3 years, 0.51 over 1 year and 0.66 over 5 years.
Is XLB a good diversifier for AA?
Only partially. A correlation of 0.61 means AA and XLB share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
What does a correlation of 0.61 mean?
A reading of 0.61 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
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Related comparisons
Hubs: AA correlations · XLB correlations
