COF vs XLF: Correlation
Capital One (COF) and Financial Select Sector SPDR Fund (XLF) 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 COF and XLF?
Across a 3-year window, the weekly returns of COF and XLF correlate at 0.78, strong. Little has changed lately, as the 1-year reading of 0.75 lands near the 3-year figure. Stretching to 5 years gives 0.79, with an annualized covariance of 386.2 %².
Among the 29 assets we track against COF, XLF ranks #4 by 3-year correlation. The trailing year gives XLF the advantage: -2.0% versus +9.3%, a 11.3-point spread. The rolling one-year correlation stayed in a tight band between 0.63 and 0.87 over the past three years, which points to a structural rather than episodic relationship. Risk is not evenly split, since COF carries 1.9 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.
COF vs XLF: side by side
| COF (Capital One) | XLF (Financial Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | -2.0% | +9.3% |
| 5-year return | +43.2% | +64.2% |
| Volatility (ann.) | 30.6% | 16.2% |
| Beta vs S&P 500 | 1.28 | 0.84 |
| Max drawdown (3Y) | -31.5% | -15.5% |
| Market cap | $132.9B | – |
| P/E (trailing) | 12.0 | – |
| Dividend yield | 1.38% | 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 | COF | XLF |
|---|---|---|
| 2022 | -34.6% | -10.6% |
| 2023 | +44.3% | +12.0% |
| 2024 | +38.2% | +30.6% |
| 2025 | +37.6% | +14.9% |
| 2026 | -9.6% | +6.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Fund exposure
Keep in mind that XLF holds COF at a 1.64% weight, which makes a slice of this correlation mechanical rather than coincidental.
Are COF and XLF good diversifiers for each other?
To a limited degree. At 0.78 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
FAQ
What is the correlation between COF and XLF?
Using weekly returns as of 2026-08-27: 0.78 over 3 years, with 0.75 over the last year and 0.79 over 5 years.
Is XLF a good diversifier for COF?
To a limited degree. At 0.78 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
What does a correlation of 0.78 mean?
On the −1 to +1 scale, 0.78 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: COF correlations · XLF correlations
