DOW vs XLB: Correlation
How closely do Dow Inc. (DOW) and Materials Select Sector SPDR Fund (XLB) trade together? Their weekly returns over three years give a correlation of 0.49, which is moderate.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are DOW and XLB?
Across a 3-year window, the weekly returns of DOW and XLB correlate at 0.49, moderate. The past 12 months show a weaker link (0.25) than the 3-year average (0.49). Stretching to 5 years gives 0.59, with an annualized covariance of 292.1 %².
Within DOW's tracked universe of 32 assets, XLB comes in at #16 by 3-year correlation. The trailing year gives DOW the advantage: +29.0% versus +17.6%, a 11.4-point spread. The relationship is regime-dependent: the rolling one-year correlation swung between 0.28 and 0.87 over the past three years, so this pair behaves very differently depending on the market environment. Note the risk asymmetry: DOW runs 2.1 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.
DOW vs XLB: side by side
| DOW (Dow Inc.) | XLB (Materials Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +29.0% | +17.6% |
| 5-year return | -38.4% | +36.9% |
| Volatility (ann.) | 35.2% | 16.7% |
| Beta vs S&P 500 | 0.62 | 0.72 |
| Max drawdown (3Y) | -62.2% | -23.2% |
| Market cap | $21.9B | – |
| P/E (trailing) | – | – |
| Dividend yield | 4.62% | 1.68% |
| Expense ratio | – | 0.08% |
| Assets under management | – | $8.3B |
| Sector / category | Materials | Sector ETF |
XLB is a Natural Resources fund from State Street Investment Management: $8.3B under management, 26 holdings, a 0.08% expense ratio, a 1.68% trailing dividend yield.
Year-by-year returns
| Year | DOW | XLB |
|---|---|---|
| 2022 | -6.6% | -12.3% |
| 2023 | +14.7% | +12.5% |
| 2024 | -22.8% | +0.1% |
| 2025 | -37.4% | +9.9% |
| 2026 | +32.6% | +18.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Fund exposure
A structural note: 2.85% of XLB is DOW itself, so the fund partly moves with the stock by construction.
Are DOW and XLB good diversifiers for each other?
Reasonably. At 0.49, DOW and XLB keep a meaningful degree of independence, and combining them has historically reduced portfolio volatility.
FAQ
What is the correlation between DOW and XLB?
The DOW/XLB correlation stands at 0.49 on a 3-year window (1 year: 0.25, 5 years: 0.59), computed from weekly returns as of 2026-08-27.
Is XLB a good diversifier for DOW?
Reasonably. At 0.49, DOW and XLB keep a meaningful degree of independence, and combining them has historically reduced portfolio volatility.
What does a correlation of 0.49 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/dow-vs-xlb.json
Embed this badge (it refreshes with the data), with attribution:
[](https://www.pairbook.io/pair/dow-vs-xlb/)
No key needed, free to use. Full endpoint list in the API documentation.
Related comparisons
Hubs: DOW correlations · XLB correlations
