ARKK vs XLY: Correlation
ARK Innovation ETF (ARKK) and Consumer Discretionary Select Sector SPDR Fund (XLY) show a strong relationship: their 3-year correlation of weekly returns is 0.78.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are ARKK and XLY?
Over the past 3 years, ARKK and XLY moved with a correlation of 0.78, which is strong. Little has changed lately, as the 1-year reading of 0.68 lands near the 3-year figure. Over 5 years the correlation is 0.78, and the annualized covariance of weekly returns is 594.2 %².
Among the 122 assets we track against ARKK, XLY ranks #5 by 3-year correlation. Their recent paths diverged sharply: over the last 12 months ARKK outperformed by 15.8 percentage points (+15.7% for ARKK against -0.1% for XLY). Stability stands out here, with the rolling one-year correlation confined to 0.65 through 0.89. Risk is not evenly split, since ARKK carries 2.0 times the volatility of the other side.
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.
ARKK vs XLY: side by side
| ARKK (ARK Innovation ETF) | XLY (Consumer Discretionary Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +15.7% | -0.1% |
| 5-year return | -27.7% | +31.8% |
| Volatility (ann.) | 38.8% | 19.7% |
| Beta vs S&P 500 | 2.07 | 1.15 |
| Max drawdown (3Y) | -39.6% | -26.0% |
| Dividend yield | – | 0.78% |
| Expense ratio | – | 0.08% |
| Assets under management | – | $22.5B |
| Sector / category | ETF · Thematic | Sector ETF |
XLY is a Consumer Cyclical fund from State Street Investment Management: $22.5B under management, 47 holdings, a 0.08% expense ratio, a 0.78% trailing dividend yield.
Year-by-year returns
| Year | ARKK | XLY |
|---|---|---|
| 2022 | -67.0% | -36.3% |
| 2023 | +69.0% | +39.6% |
| 2024 | +8.4% | +26.5% |
| 2025 | +35.5% | +7.4% |
| 2026 | +13.6% | -2.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are ARKK and XLY good diversifiers for each other?
Only partially. A correlation of 0.78 means ARKK and XLY 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 ARKK and XLY?
The ARKK/XLY correlation stands at 0.78 on a 3-year window (1 year: 0.68, 5 years: 0.78), computed from weekly returns as of 2026-08-27.
Is XLY a good diversifier for ARKK?
Only partially. A correlation of 0.78 means ARKK and XLY share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
What does a correlation of 0.78 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/arkk-vs-xly.json
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Related comparisons
Hubs: ARKK correlations · XLY correlations
