ARE vs XLRE: Correlation
Alexandria Real Estate Equities (ARE) and Real Estate Select Sector SPDR Fund (XLRE) show a strong relationship: their 3-year correlation of weekly returns is 0.63.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are ARE and XLRE?
Across a 3-year window, the weekly returns of ARE and XLRE correlate at 0.63, strong. The link has loosened recently: the 1-year correlation (0.47) runs below the 3-year figure (0.63). Stretching to 5 years gives 0.70, with an annualized covariance of 405.3 %².
Among the 34 assets we track against ARE, XLRE ranks #6 by 3-year correlation. Their recent paths diverged sharply: over the last 12 months XLRE outperformed by 41.6 percentage points (-32.1% for ARE against +9.5% for XLRE). On a rolling one-year basis the correlation drifted between 0.49 and 0.87, a moderate band. One caveat on sizing: ARE is 2.3 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.
ARE vs XLRE: side by side
| ARE (Alexandria Real Estate Equities) | XLRE (Real Estate Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | -32.1% | +9.5% |
| 5-year return | -68.3% | +11.4% |
| Volatility (ann.) | 38.3% | 16.7% |
| Beta vs S&P 500 | 0.91 | 0.57 |
| Max drawdown (3Y) | -65.6% | -16.6% |
| Market cap | $9.0B | – |
| P/E (trailing) | – | – |
| Dividend yield | 6.57% | 3.12% |
| Expense ratio | – | 0.08% |
| Assets under management | – | $8.6B |
| Sector / category | Real Estate | Sector ETF |
On the fund side, XLRE sits in the Real Estate category at State Street Investment Management, with $8.6B under management, 31 holdings, a 0.08% expense ratio, a 3.12% trailing dividend yield.
Year-by-year returns
| Year | ARE | XLRE |
|---|---|---|
| 2022 | -32.6% | -26.2% |
| 2023 | -9.1% | +12.4% |
| 2024 | -19.4% | +5.1% |
| 2025 | -46.6% | +2.6% |
| 2026 | +9.9% | +12.4% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Fund exposure
ARE represents 0.84% of XLRE's portfolio, so part of any move in XLRE is ARE itself, and the correlation between them is partly mechanical.
Are ARE and XLRE good diversifiers for each other?
Only partially. A correlation of 0.63 means ARE and XLRE 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 ARE and XLRE?
As of 2026-08-27, the correlation of weekly returns between ARE and XLRE is 0.63 over 3 years, 0.47 over 1 year and 0.70 over 5 years.
Is XLRE a good diversifier for ARE?
Only partially. A correlation of 0.63 means ARE and XLRE share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
What does a correlation of 0.63 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/are-vs-xlre.json
Embed this badge (it refreshes with the data), with attribution:
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Related comparisons
Hubs: ARE correlations · XLRE correlations
