EEM vs XLB: Correlation & Overlap
How closely do iShares MSCI Emerging Markets ETF (EEM) and Materials Select Sector SPDR Fund (XLB) trade together? Their weekly returns over three years give a correlation of 0.59, which is moderate. By holdings, the two funds overlap 0% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are EEM and XLB?
On 3 years of weekly data the EEM/XLB correlation comes out at 0.59, moderate. Recent behaviour matches the longer record: 0.50 over 1 year against 0.59 over 3. The 5-year figure is 0.63, and annualized covariance runs at 176.1 %².
Within EEM's tracked universe of 67 assets, XLB comes in at #35 by 3-year correlation. Correlation aside, the last 12 months split them widely, with EEM ahead by 20.5 points (+38.1% versus +17.6%). Across three years, the rolling one-year figure varied moderately, from 0.47 to 0.79.
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.
EEM vs XLB: side by side
| EEM (iShares MSCI Emerging Markets ETF) | XLB (Materials Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +38.1% | +17.6% |
| 5-year return | +47.1% | +36.9% |
| Volatility (ann.) | 18.0% | 16.7% |
| Beta vs S&P 500 | 0.85 | 0.72 |
| Max drawdown (3Y) | -17.3% | -23.2% |
| Dividend yield | 1.73% | 1.68% |
| Expense ratio | 0.72% | 0.08% |
| Assets under management | $29.2B | $8.3B |
| Sector / category | ETF · International | Sector ETF |
On the fund side, EEM sits in the Diversified Emerging Mkts category at iShares, with $29.2B under management, 968 holdings, a 0.72% expense ratio, a 1.73% trailing dividend yield. 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.
Portfolio overlap between EEM and XLB
The two portfolios are largely distinct. Weighing the shared positions, 0% of the two funds is identical, spread across 0 common holdings. That shared book is a large part of why the returns line up.
Largest positions held only by EEM: 2330 (15.14%), 005930 (7.15%), 000660 (5.45%), 700 (2.83%), 9988 (2.02%). Only by XLB: LIN (12.94%), NEM (8.02%), FCX (6.48%), SHW (4.87%), ECL (4.80%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26.
Year-by-year returns
| Year | EEM | XLB |
|---|---|---|
| 2022 | -20.6% | -12.3% |
| 2023 | +8.9% | +12.5% |
| 2024 | +6.5% | +0.1% |
| 2025 | +34.0% | +9.9% |
| 2026 | +24.2% | +18.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are EEM and XLB good diversifiers for each other?
Somewhat, no more. With 0.59 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between EEM and XLB?
Using weekly returns as of 2026-08-27: 0.59 over 3 years, with 0.50 over the last year and 0.63 over 5 years.
Is XLB a good diversifier for EEM?
Somewhat, no more. With 0.59 correlation, most large moves hit both names, and the diversification benefit stays modest.
How much do EEM and XLB overlap?
The two funds share 0 holdings amounting to 0% of weight, per issuer portfolio files dated 2026-08-26.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/eem-vs-xlb.json
Embed this badge (it refreshes with the data), with attribution:
[](https://www.pairbook.io/pair/eem-vs-xlb/)
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Related comparisons
Hubs: EEM correlations · XLB correlations
