EFA vs XLC: Correlation & Overlap
Measured on weekly returns over the past three years, iShares MSCI EAFE ETF (EFA) and Communication Services Select Sector SPDR Fund (XLC) carry a correlation of 0.62, a strong link. 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 EFA and XLC?
Across a 3-year window, the weekly returns of EFA and XLC correlate at 0.62, strong. The link has loosened recently: the 1-year correlation (0.49) runs below the 3-year figure (0.62). Stretching to 5 years gives 0.66, with an annualized covariance of 147.9 %².
Among the 109 assets we track against EFA, XLC ranks #60 by 3-year correlation. Correlation aside, the last 12 months split them widely, with EFA ahead by 20.4 points (+21.9% versus +1.5%). On a rolling one-year basis the correlation drifted between 0.49 and 0.75, a moderate band.
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 XLC: side by side
| EFA (iShares MSCI EAFE ETF) | XLC (Communication Services Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +21.9% | +1.5% |
| 5-year return | +56.7% | +37.5% |
| Volatility (ann.) | 14.9% | 16.0% |
| Beta vs S&P 500 | 0.77 | 0.90 |
| Max drawdown (3Y) | -14.1% | -18.0% |
| Dividend yield | 3.19% | 1.32% |
| Expense ratio | 0.32% | 0.08% |
| Assets under management | $78.0B | $21.7B |
| Sector / category | ETF · International | Sector ETF |
EFA, iShares's Foreign Large Blend fund, carries $78.0B under management, 666 holdings, a 0.32% expense ratio, a 3.19% trailing dividend yield. On the fund side, XLC sits in the Communications category at State Street Investment Management, with $21.7B under management, 24 holdings, a 0.08% expense ratio, a 1.32% trailing dividend yield.
Portfolio overlap between EFA and XLC
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 EFA: ASML (2.99%), HSBA (1.57%), ROP (1.42%), SAN (1.38%), NOVN (1.28%). Only by XLC: META (16.73%), GOOGL (10.29%), GOOG (8.22%), T (5.20%), VZ (4.99%).
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 | EFA | XLC |
|---|---|---|
| 2022 | -14.4% | -37.6% |
| 2023 | +18.4% | +52.8% |
| 2024 | +3.5% | +34.7% |
| 2025 | +31.5% | +23.1% |
| 2026 | +14.3% | -4.8% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are EFA and XLC good diversifiers for each other?
To a limited degree. At 0.62 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 EFA and XLC?
As of 2026-08-27, the correlation of weekly returns between EFA and XLC is 0.62 over 3 years, 0.49 over 1 year and 0.66 over 5 years.
Is XLC a good diversifier for EFA?
To a limited degree. At 0.62 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 EFA and XLC 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/efa-vs-xlc.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/efa-vs-xlc/)
The core API is free. Terms and every endpoint in the API documentation.
Related comparisons
Hubs: EFA correlations · XLC correlations
