EFA vs XLK: Correlation & Overlap
Measured on weekly returns over the past three years, iShares MSCI EAFE ETF (EFA) and Technology Select Sector SPDR Fund (XLK) carry a correlation of 0.60, a strong link. Looking through to holdings, 0.3% 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 XLK?
On 3 years of weekly data the EFA/XLK correlation comes out at 0.60, strong. Recent behaviour matches the longer record: 0.52 over 1 year against 0.60 over 3. The 5-year figure is 0.66, and annualized covariance runs at 213.8 %².
By 3-year correlation, XLK places #66 of the 109 assets tracked against EFA. The last year tells two different stories: XLK led by 21.5 percentage points, +21.9% for EFA against +43.4% for XLK. The rolling one-year correlation moved between 0.47 and 0.74 over the past three years, a moderate range. Note the risk asymmetry: XLK runs 1.6 times the annualized volatility of the other leg, so equal-weighting the two is not an equal-risk position.
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 XLK: side by side
| EFA (iShares MSCI EAFE ETF) | XLK (Technology Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +21.9% | +43.4% |
| 5-year return | +56.7% | +145.2% |
| Volatility (ann.) | 14.9% | 24.0% |
| Beta vs S&P 500 | 0.77 | 1.50 |
| Max drawdown (3Y) | -14.1% | -25.7% |
| Dividend yield | 3.19% | 0.45% |
| Expense ratio | 0.32% | 0.08% |
| Assets under management | $78.0B | $115.4B |
| 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, 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 EFA and XLK
The two portfolios are largely distinct: 0.3% of the funds' weight sits in the same underlying holdings (2 common positions). Correlation tells you they move together; overlap tells you why.
Largest positions held only by EFA: ASML (2.99%), HSBA (1.57%), SAN (1.38%), NOVN (1.28%), SHEL (1.14%). 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 2 common positions shown.
Year-by-year returns
| Year | EFA | XLK |
|---|---|---|
| 2022 | -14.4% | -27.7% |
| 2023 | +18.4% | +56.0% |
| 2024 | +3.5% | +21.6% |
| 2025 | +31.5% | +24.6% |
| 2026 | +14.3% | +31.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are EFA and XLK good diversifiers for each other?
To a limited degree. At 0.60 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 XLK?
Using weekly returns as of 2026-08-27: 0.60 over 3 years, with 0.52 over the last year and 0.66 over 5 years.
Is XLK a good diversifier for EFA?
To a limited degree. At 0.60 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 XLK overlap?
The two funds share 2 holdings amounting to 0.3% of weight, per issuer portfolio files dated 2026-08-26.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/efa-vs-xlk.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/efa-vs-xlk/)
The core API is free. Terms and every endpoint in the API documentation.
Related comparisons
Hubs: EFA correlations · XLK correlations
