BAC vs XLF: Correlation
How closely do Bank of America (BAC) and Financial Select Sector SPDR Fund (XLF) trade together? Their weekly returns over three years give a correlation of 0.84, which is very strong.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are BAC and XLF?
On 3 years of weekly data the BAC/XLF correlation comes out at 0.84, very strong, meaning they move nearly in lockstep. The relationship has been stable: the 1-year correlation (0.79) sits close to the 3-year figure. The 5-year figure is 0.86, and annualized covariance runs at 361.2 %².
In BAC's tracked universe of 45 assets, XLF sits right near the top at #2. Over the last 12 months BAC came out ahead by 14.8 percentage points (+24.1% against +9.3%). Stability stands out here, with the rolling one-year correlation confined to 0.75 through 0.91. Note the risk asymmetry: BAC runs 1.6 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.
BAC vs XLF: side by side
| BAC (Bank of America) | XLF (Financial Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +24.1% | +9.3% |
| 5-year return | +66.0% | +64.2% |
| Volatility (ann.) | 26.5% | 16.2% |
| Beta vs S&P 500 | 1.11 | 0.84 |
| Max drawdown (3Y) | -27.5% | -15.5% |
| Market cap | $427.7B | – |
| P/E (trailing) | 14.1 | – |
| Dividend yield | 1.80% | 1.42% |
| Expense ratio | – | 0.08% |
| Assets under management | – | $57.9B |
| Sector / category | Financials | Sector ETF |
XLF is a Financial fund from State Street Investment Management: $57.9B under management, 77 holdings, a 0.08% expense ratio, a 1.42% trailing dividend yield.
Year-by-year returns
| Year | BAC | XLF |
|---|---|---|
| 2022 | -23.8% | -10.6% |
| 2023 | +4.8% | +12.0% |
| 2024 | +33.9% | +30.6% |
| 2025 | +28.0% | +14.9% |
| 2026 | +12.4% | +6.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Fund exposure
A structural note: 4.94% of XLF is BAC itself, so the fund partly moves with the stock by construction.
Are BAC and XLF good diversifiers for each other?
No. With a correlation of 0.84, BAC and XLF move nearly in lockstep, so holding both adds very little diversification.
FAQ
What is the correlation between BAC and XLF?
As of 2026-08-27, the correlation of weekly returns between BAC and XLF is 0.84 over 3 years, 0.79 over 1 year and 0.86 over 5 years.
Is XLF a good diversifier for BAC?
No. With a correlation of 0.84, BAC and XLF move nearly in lockstep, so holding both adds very little diversification.
What does a correlation of 0.84 mean?
On the −1 to +1 scale, 0.84 describes how much the two returns move together: +1 is lockstep, 0 is independence, negative values mean opposite directions. It says nothing about which performed better.
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Related comparisons
Hubs: BAC correlations · XLF correlations
