EEM vs XLY: Correlation & Overlap
iShares MSCI Emerging Markets ETF (EEM) and Consumer Discretionary Select Sector SPDR Fund (XLY) show a moderate relationship: their 3-year correlation of weekly returns is 0.58. 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 XLY?
On 3 years of weekly data the EEM/XLY correlation comes out at 0.58, moderate. The relationship has been stable: the 1-year correlation (0.59) sits close to the 3-year figure. The 5-year figure is 0.56, and annualized covariance runs at 203.7 %².
Within EEM's tracked universe of 67 assets, XLY comes in at #39 by 3-year correlation. The last year tells two different stories: EEM led by 38.2 percentage points, +38.1% for EEM against -0.1% for XLY. Stability stands out here, with the rolling one-year correlation confined to 0.47 through 0.69.
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 XLY: side by side
| EEM (iShares MSCI Emerging Markets ETF) | XLY (Consumer Discretionary Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +38.1% | -0.1% |
| 5-year return | +47.1% | +31.8% |
| Volatility (ann.) | 18.0% | 19.7% |
| Beta vs S&P 500 | 0.85 | 1.15 |
| Max drawdown (3Y) | -17.3% | -26.0% |
| Dividend yield | 1.73% | 0.78% |
| Expense ratio | 0.72% | 0.08% |
| Assets under management | $29.2B | $22.5B |
| 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. XLY is a Consumer Cyclical fund from State Street Investment Management: $22.5B under management, 47 holdings, a 0.08% expense ratio, a 0.78% trailing dividend yield.
Portfolio overlap between EEM and XLY
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 XLY: AMZN (24.32%), TSLA (16.18%), HD (5.54%), MCD (4.11%), BKNG (4.04%).
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 | XLY |
|---|---|---|
| 2022 | -20.6% | -36.3% |
| 2023 | +8.9% | +39.6% |
| 2024 | +6.5% | +26.5% |
| 2025 | +34.0% | +7.4% |
| 2026 | +24.2% | -2.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are EEM and XLY good diversifiers for each other?
To a limited degree. At 0.58 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
FAQ
What is the correlation between EEM and XLY?
As of 2026-08-27, the correlation of weekly returns between EEM and XLY is 0.58 over 3 years, 0.59 over 1 year and 0.56 over 5 years.
Is XLY a good diversifier for EEM?
To a limited degree. At 0.58 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
How much do EEM and XLY 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-xly.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/eem-vs-xly/)
Free with attribution; caching and terms are described in the API documentation.
Related comparisons
Hubs: EEM correlations · XLY correlations
