EEM vs XLRE: Correlation & Overlap
How closely do iShares MSCI Emerging Markets ETF (EEM) and Real Estate Select Sector SPDR Fund (XLRE) trade together? Their weekly returns over three years give a correlation of 0.37, which is moderate. The two funds also share 0% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are EEM and XLRE?
Across a 3-year window, the weekly returns of EEM and XLRE correlate at 0.37, moderate. The past 12 months show a weaker link (0.23) than the 3-year average (0.37). Stretching to 5 years gives 0.41, with an annualized covariance of 110.5 %².
By 3-year correlation, XLRE places #53 of the 67 assets tracked against EEM. The last year tells two different stories: EEM led by 28.6 percentage points, +38.1% for EEM against +9.5% for XLRE. The rolling one-year correlation moved between 0.24 and 0.68 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 XLRE: side by side
| EEM (iShares MSCI Emerging Markets ETF) | XLRE (Real Estate Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +38.1% | +9.5% |
| 5-year return | +47.1% | +11.4% |
| Volatility (ann.) | 18.0% | 16.7% |
| Beta vs S&P 500 | 0.85 | 0.57 |
| Max drawdown (3Y) | -17.3% | -16.6% |
| Dividend yield | 1.73% | 3.12% |
| Expense ratio | 0.72% | 0.08% |
| Assets under management | $29.2B | $8.6B |
| 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, XLRE sits in the Real Estate category at State Street Investment Management, with $8.6B under management, 31 holdings, a 0.08% expense ratio, a 3.12% trailing dividend yield.
Portfolio overlap between EEM and XLRE
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 XLRE: WELL (11.43%), PLD (9.06%), EQIX (7.14%), AMT (5.49%), DLR (5.01%).
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 | XLRE |
|---|---|---|
| 2022 | -20.6% | -26.2% |
| 2023 | +8.9% | +12.4% |
| 2024 | +6.5% | +5.1% |
| 2025 | +34.0% | +2.6% |
| 2026 | +24.2% | +12.4% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are EEM and XLRE good diversifiers for each other?
Yes, to a useful degree: a correlation of 0.37 leaves real independence between the two, which historically damped combined volatility.
FAQ
What is the correlation between EEM and XLRE?
Using weekly returns as of 2026-08-27: 0.37 over 3 years, with 0.23 over the last year and 0.41 over 5 years.
Is XLRE a good diversifier for EEM?
Yes, to a useful degree: a correlation of 0.37 leaves real independence between the two, which historically damped combined volatility.
How much do EEM and XLRE overlap?
0% by weight, across 0 common holdings, based on issuer-disclosed portfolios as of 2026-08-26.
Use this data
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Related comparisons
Hubs: EEM correlations · XLRE correlations
