EEM vs XLK: Correlation & Overlap
How closely do iShares MSCI Emerging Markets ETF (EEM) and Technology Select Sector SPDR Fund (XLK) trade together? Their weekly returns over three years give a correlation of 0.70, which is strong. Looking through to holdings, 0.0% 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 XLK?
Over the past 3 years, EEM and XLK moved with a correlation of 0.70, which is strong. Little has changed lately, as the 1-year reading of 0.73 lands near the 3-year figure. Over 5 years the correlation is 0.64, and the annualized covariance of weekly returns is 299.8 %².
Within EEM's tracked universe of 67 assets, XLK comes in at #19 by 3-year correlation. On 12-month performance XLK holds a 5.3-point edge, +38.1% against +43.4%. The rolling one-year correlation moved between 0.44 and 0.79 over the past three years, a moderate range.
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 XLK: side by side
| EEM (iShares MSCI Emerging Markets ETF) | XLK (Technology Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +38.1% | +43.4% |
| 5-year return | +47.1% | +145.2% |
| Volatility (ann.) | 18.0% | 24.0% |
| Beta vs S&P 500 | 0.85 | 1.50 |
| Max drawdown (3Y) | -17.3% | -25.7% |
| Dividend yield | 1.73% | 0.45% |
| Expense ratio | 0.72% | 0.08% |
| Assets under management | $29.2B | $115.4B |
| 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. On the fund side, XLK sits in the Technology category at State Street Investment Management, with $115.4B under management, 73 holdings, a 0.08% expense ratio, a 0.45% trailing dividend yield.
Portfolio overlap between EEM and XLK
The two portfolios are largely distinct. Weighing the shared positions, 0.0% of the two funds is identical, spread across 1 common holdings. That shared book is a large part of why the returns line up.
| Common holding | Weight in EEM | Weight in XLK |
|---|---|---|
| TEL | 0.01% | 0.40% |
Largest positions held only by EEM: 2330 (15.14%), 005930 (7.15%), 000660 (5.45%), 700 (2.83%), 9988 (2.02%). Only by XLK: NVDA (13.91%), AAPL (12.61%), MSFT (10.10%), AVGO (4.61%), AMD (4.09%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26. Top 1 common positions shown.
Year-by-year returns
| Year | EEM | XLK |
|---|---|---|
| 2022 | -20.6% | -27.7% |
| 2023 | +8.9% | +56.0% |
| 2024 | +6.5% | +21.6% |
| 2025 | +34.0% | +24.6% |
| 2026 | +24.2% | +31.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are EEM and XLK good diversifiers for each other?
Somewhat, no more. With 0.70 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between EEM and XLK?
Using weekly returns as of 2026-08-27: 0.70 over 3 years, with 0.73 over the last year and 0.64 over 5 years.
Is XLK a good diversifier for EEM?
Somewhat, no more. With 0.70 correlation, most large moves hit both names, and the diversification benefit stays modest.
How much do EEM and XLK overlap?
0.0% by weight, across 1 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-xlk.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/eem-vs-xlk/)
The core API is free. Terms and every endpoint in the API documentation.
Related comparisons
Hubs: EEM correlations · XLK correlations
