EFA vs XLY: Correlation & Overlap
iShares MSCI EAFE ETF (EFA) and Consumer Discretionary Select Sector SPDR Fund (XLY) show a strong relationship: their 3-year correlation of weekly returns is 0.64. The two funds also share 0.2% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are EFA and XLY?
On 3 years of weekly data the EFA/XLY correlation comes out at 0.64, strong. Recent behaviour matches the longer record: 0.65 over 1 year against 0.64 over 3. The 5-year figure is 0.69, and annualized covariance runs at 187.1 %².
Among the 109 assets we track against EFA, XLY ranks #52 by 3-year correlation. The last year tells two different stories: EFA led by 22.0 percentage points, +21.9% for EFA against -0.1% for XLY. On a rolling one-year basis the correlation drifted between 0.50 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 XLY: side by side
| EFA (iShares MSCI EAFE ETF) | XLY (Consumer Discretionary Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +21.9% | -0.1% |
| 5-year return | +56.7% | +31.8% |
| Volatility (ann.) | 14.9% | 19.7% |
| Beta vs S&P 500 | 0.77 | 1.15 |
| Max drawdown (3Y) | -14.1% | -26.0% |
| Dividend yield | 3.19% | 0.78% |
| Expense ratio | 0.32% | 0.08% |
| Assets under management | $78.0B | $22.5B |
| 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. 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 EFA and XLY
The two portfolios are largely distinct: 0.2% of the funds' weight sits in the same underlying holdings (1 common positions). Correlation tells you they move together; overlap tells you why.
| Common holding | Weight in EFA | Weight in XLY |
|---|---|---|
| TSCO | 0.18% | 0.46% |
Largest positions held only by EFA: ASML (2.99%), HSBA (1.57%), ROP (1.42%), SAN (1.38%), NOVN (1.28%). 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. Top 1 common positions shown.
Year-by-year returns
| Year | EFA | XLY |
|---|---|---|
| 2022 | -14.4% | -36.3% |
| 2023 | +18.4% | +39.6% |
| 2024 | +3.5% | +26.5% |
| 2025 | +31.5% | +7.4% |
| 2026 | +14.3% | -2.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are EFA and XLY good diversifiers for each other?
To a limited degree. At 0.64 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 XLY?
Using weekly returns as of 2026-08-27: 0.64 over 3 years, with 0.65 over the last year and 0.69 over 5 years.
Is XLY a good diversifier for EFA?
To a limited degree. At 0.64 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 XLY overlap?
Per the issuers' own portfolio disclosures (2026-08-26), the overlap is 0.2% by weight over 1 common positions.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/efa-vs-xly.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/efa-vs-xly/)
Free with attribution; caching and terms are described in the API documentation.
Related comparisons
Hubs: EFA correlations · XLY correlations
