EEM vs XLI: Correlation & Overlap
iShares MSCI Emerging Markets ETF (EEM) and Industrial Select Sector SPDR Fund (XLI) show a moderate relationship: their 3-year correlation of weekly returns is 0.59. 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 XLI?
Across a 3-year window, the weekly returns of EEM and XLI correlate at 0.59, moderate. The relationship has been stable: the 1-year correlation (0.55) sits close to the 3-year figure. Stretching to 5 years gives 0.58, with an annualized covariance of 165.8 %².
Among the 67 assets we track against EEM, XLI ranks #36 by 3-year correlation. Their recent paths diverged sharply: over the last 12 months EEM outperformed by 19.8 percentage points (+38.1% for EEM against +18.3% for XLI). Across three years, the rolling one-year figure varied moderately, from 0.41 to 0.76.
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 XLI: side by side
| EEM (iShares MSCI Emerging Markets ETF) | XLI (Industrial Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +38.1% | +18.3% |
| 5-year return | +47.1% | +84.0% |
| Volatility (ann.) | 18.0% | 15.7% |
| Beta vs S&P 500 | 0.85 | 0.89 |
| Max drawdown (3Y) | -17.3% | -18.5% |
| Dividend yield | 1.73% | 1.15% |
| Expense ratio | 0.72% | 0.08% |
| Assets under management | $29.2B | $32.9B |
| 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. 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.
Portfolio overlap between EEM and XLI
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 XLI: CAT (6.68%), GE (6.52%), RTX (5.04%), GEV (4.52%), UNP (3.25%).
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 | XLI |
|---|---|---|
| 2022 | -20.6% | -5.6% |
| 2023 | +8.9% | +18.1% |
| 2024 | +6.5% | +17.3% |
| 2025 | +34.0% | +19.3% |
| 2026 | +24.2% | +15.9% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are EEM and XLI good diversifiers for each other?
Only partially. A correlation of 0.59 means EEM 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 EEM and XLI?
The EEM/XLI correlation stands at 0.59 on a 3-year window (1 year: 0.55, 5 years: 0.58), computed from weekly returns as of 2026-08-27.
Is XLI a good diversifier for EEM?
Only partially. A correlation of 0.59 means EEM and XLI share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
How much do EEM and XLI overlap?
0% by weight, across 0 common holdings, based on issuer-disclosed portfolios as of 2026-08-26.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/eem-vs-xli.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/eem-vs-xli/)
No key needed, free to use. Full endpoint list in the API documentation.
Related comparisons
Hubs: EEM correlations · XLI correlations
