EFA vs XLB: Correlation & Overlap
iShares MSCI EAFE ETF (EFA) and Materials Select Sector SPDR Fund (XLB) show a strong relationship: their 3-year correlation of weekly returns is 0.75. Looking through to holdings, 0.1% 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 EFA and XLB?
Across a 3-year window, the weekly returns of EFA and XLB correlate at 0.75, strong. Little has changed lately, as the 1-year reading of 0.70 lands near the 3-year figure. Stretching to 5 years gives 0.80, with an annualized covariance of 187.5 %².
Within EFA's tracked universe of 109 assets, XLB comes in at #30 by 3-year correlation. Twelve-month performance is nearly a tie, at +21.9% for EFA and +17.6% for XLB. The link looks structural: the rolling one-year correlation barely moved, holding between 0.66 and 0.90.
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.
EFA vs XLB: side by side
| EFA (iShares MSCI EAFE ETF) | XLB (Materials Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +21.9% | +17.6% |
| 5-year return | +56.7% | +36.9% |
| Volatility (ann.) | 14.9% | 16.7% |
| Beta vs S&P 500 | 0.77 | 0.72 |
| Max drawdown (3Y) | -14.1% | -23.2% |
| Dividend yield | 3.19% | 1.68% |
| Expense ratio | 0.32% | 0.08% |
| Assets under management | $78.0B | $8.3B |
| Sector / category | ETF · International | Sector ETF |
EFA is a Foreign Large Blend fund from iShares: $78.0B under management, 666 holdings, a 0.32% expense ratio, a 3.19% trailing dividend yield. XLB is a Natural Resources fund from State Street Investment Management: $8.3B under management, 26 holdings, a 0.08% expense ratio, a 1.68% trailing dividend yield.
Portfolio overlap between EFA and XLB
The two portfolios are largely distinct, with 2 holdings in common adding up to 0.1% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
Largest positions held only by EFA: ASML (2.99%), HSBA (1.57%), ROP (1.42%), SAN (1.38%), NOVN (1.28%). Only by XLB: LIN (12.94%), FCX (6.48%), SHW (4.87%), ECL (4.80%), CTVA (4.72%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26. Top 2 common positions shown.
Year-by-year returns
| Year | EFA | XLB |
|---|---|---|
| 2022 | -14.4% | -12.3% |
| 2023 | +18.4% | +12.5% |
| 2024 | +3.5% | +0.1% |
| 2025 | +31.5% | +9.9% |
| 2026 | +14.3% | +18.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are EFA and XLB good diversifiers for each other?
Somewhat, no more. With 0.75 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between EFA and XLB?
As of 2026-08-27, the correlation of weekly returns between EFA and XLB is 0.75 over 3 years, 0.70 over 1 year and 0.80 over 5 years.
Is XLB a good diversifier for EFA?
Somewhat, no more. With 0.75 correlation, most large moves hit both names, and the diversification benefit stays modest.
How much do EFA and XLB overlap?
0.1% by weight, across 2 common holdings, based on issuer-disclosed portfolios as of 2026-08-26.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/efa-vs-xlb.json
Embed this badge (it refreshes with the data), with attribution:
[](https://www.pairbook.io/pair/efa-vs-xlb/)
No key needed, free to use. Full endpoint list in the API documentation.
Related comparisons
Hubs: EFA correlations · XLB correlations
