CAT vs XLI: Correlation
Caterpillar Inc. (CAT) and Industrial Select Sector SPDR Fund (XLI) show a strong relationship: their 3-year correlation of weekly returns is 0.73.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are CAT and XLI?
On 3 years of weekly data the CAT/XLI correlation comes out at 0.73, strong. Recent behaviour matches the longer record: 0.63 over 1 year against 0.73 over 3. The 5-year figure is 0.74, and annualized covariance runs at 336.7 %².
XLI is one of the assets that tracks CAT most closely: it ranks #1 out of the 36 assets we track against CAT. Correlation aside, the last 12 months split them widely, with CAT ahead by 72.2 points (+90.5% versus +18.3%). The rolling one-year correlation stayed in a tight band between 0.61 and 0.85 over the past three years, which points to a structural rather than episodic relationship. One caveat on sizing: CAT is 1.9 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.
CAT vs XLI: side by side
| CAT (Caterpillar Inc.) | XLI (Industrial Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +90.5% | +18.3% |
| 5-year return | +321.1% | +84.0% |
| Volatility (ann.) | 29.4% | 15.7% |
| Beta vs S&P 500 | 1.03 | 0.89 |
| Max drawdown (3Y) | -34.0% | -18.5% |
| Market cap | $375.6B | – |
| P/E (trailing) | 35.3 | – |
| Dividend yield | 0.75% | 1.15% |
| Expense ratio | – | 0.08% |
| Assets under management | – | $32.9B |
| Sector / category | Industrials | Sector ETF |
XLI is an Industrials fund from State Street Investment Management: $32.9B under management, 83 holdings, a 0.08% expense ratio, a 1.15% trailing dividend yield.
Year-by-year returns
| Year | CAT | XLI |
|---|---|---|
| 2022 | +18.6% | -5.6% |
| 2023 | +25.9% | +18.1% |
| 2024 | +24.7% | +17.3% |
| 2025 | +60.3% | +19.3% |
| 2026 | +43.5% | +15.9% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Fund exposure
A structural note: 6.68% of XLI is CAT itself, so the fund partly moves with the stock by construction.
Are CAT and XLI good diversifiers for each other?
Only partially. A correlation of 0.73 means CAT and XLI 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 CAT and XLI?
The CAT/XLI correlation stands at 0.73 on a 3-year window (1 year: 0.63, 5 years: 0.74), computed from weekly returns as of 2026-08-27.
Is XLI a good diversifier for CAT?
Only partially. A correlation of 0.73 means CAT and XLI share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
What does a correlation of 0.73 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/cat-vs-xli.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/cat-vs-xli/)
No key needed, free to use. Full endpoint list in the API documentation.
Related comparisons
Hubs: CAT correlations · XLI correlations
