EEM vs XLC: Correlation & Overlap
iShares MSCI Emerging Markets ETF (EEM) and Communication Services Select Sector SPDR Fund (XLC) show a moderate relationship: their 3-year correlation of weekly returns is 0.51. Looking through to holdings, 0% of the two portfolios is the same by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are EEM and XLC?
Over the past 3 years, EEM and XLC moved with a correlation of 0.51, which is moderate. Little has changed lately, as the 1-year reading of 0.42 lands near the 3-year figure. Over 5 years the correlation is 0.56, and the annualized covariance of weekly returns is 146.2 %².
Within EEM's tracked universe of 67 assets, XLC comes in at #46 by 3-year correlation. The last year tells two different stories: EEM led by 36.6 percentage points, +38.1% for EEM against +1.5% for XLC. Across three years, the rolling one-year figure varied moderately, from 0.38 to 0.73.
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 XLC: side by side
| EEM (iShares MSCI Emerging Markets ETF) | XLC (Communication Services Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +38.1% | +1.5% |
| 5-year return | +47.1% | +37.5% |
| Volatility (ann.) | 18.0% | 16.0% |
| Beta vs S&P 500 | 0.85 | 0.90 |
| Max drawdown (3Y) | -17.3% | -18.0% |
| Dividend yield | 1.73% | 1.32% |
| Expense ratio | 0.72% | 0.08% |
| Assets under management | $29.2B | $21.7B |
| Sector / category | ETF · International | Sector ETF |
EEM is a Diversified Emerging Mkts fund from iShares: $29.2B under management, 968 holdings, a 0.72% expense ratio, a 1.73% trailing dividend yield. On the fund side, XLC sits in the Communications category at State Street Investment Management, with $21.7B under management, 24 holdings, a 0.08% expense ratio, a 1.32% trailing dividend yield.
Portfolio overlap between EEM and XLC
The two portfolios are largely distinct: 0% of the funds' weight sits in the same underlying holdings (0 common positions). Correlation tells you they move together; overlap tells you why.
Largest positions held only by EEM: 2330 (15.14%), 005930 (7.15%), 000660 (5.45%), 700 (2.83%), 9988 (2.02%). Only by XLC: META (16.73%), GOOGL (10.29%), GOOG (8.22%), T (5.20%), VZ (4.99%).
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 | XLC |
|---|---|---|
| 2022 | -20.6% | -37.6% |
| 2023 | +8.9% | +52.8% |
| 2024 | +6.5% | +34.7% |
| 2025 | +34.0% | +23.1% |
| 2026 | +24.2% | -4.8% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are EEM and XLC good diversifiers for each other?
Only partially. A correlation of 0.51 means EEM and XLC 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 EEM and XLC?
Using weekly returns as of 2026-08-27: 0.51 over 3 years, with 0.42 over the last year and 0.56 over 5 years.
Is XLC a good diversifier for EEM?
Only partially. A correlation of 0.51 means EEM and XLC share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
How much do EEM and XLC overlap?
Per the issuers' own portfolio disclosures (2026-08-26), the overlap is 0% by weight over 0 common positions.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/eem-vs-xlc.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/eem-vs-xlc/)
The core API is free. Terms and every endpoint in the API documentation.
Related comparisons
Hubs: EEM correlations · XLC correlations
