EWJ vs XLE: Correlation & Overlap
Measured on weekly returns over the past three years, iShares MSCI Japan ETF (EWJ) and Energy Select Sector SPDR Fund (XLE) carry a correlation of 0.12, a weak link. The two funds also share 0% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are EWJ and XLE?
On 3 years of weekly data the EWJ/XLE correlation comes out at 0.12, weak. Lately the two have drifted apart, with the 1-year correlation at -0.27 versus 0.12 over 3 years. The 5-year figure is 0.19, and annualized covariance runs at 54.0 %².
Within EWJ's tracked universe of 70 assets, XLE comes in at #60 by 3-year correlation. Their recent paths diverged sharply: over the last 12 months XLE outperformed by 16.9 percentage points (+27.1% for EWJ against +44.0% for XLE). Do not treat this figure as fixed: across three years the rolling one-year correlation ranged all the way from -0.29 to 0.52.
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.
EWJ vs XLE: side by side
| EWJ (iShares MSCI Japan ETF) | XLE (Energy Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +27.1% | +44.0% |
| 5-year return | +58.6% | +206.7% |
| Volatility (ann.) | 19.6% | 23.1% |
| Beta vs S&P 500 | 0.94 | 0.27 |
| Max drawdown (3Y) | -14.7% | -20.1% |
| Dividend yield | 3.86% | 2.55% |
| Expense ratio | 0.49% | 0.08% |
| Assets under management | $21.8B | $39.2B |
| Sector / category | ETF · International | Sector ETF |
EWJ is a Japan Stock fund from iShares: $21.8B under management, 168 holdings, a 0.49% expense ratio, a 3.86% trailing dividend yield. XLE is an Equity Energy fund from State Street Investment Management: $39.2B under management, 22 holdings, a 0.08% expense ratio, a 2.55% trailing dividend yield.
Portfolio overlap between EWJ and XLE
The two portfolios are largely distinct, with 0 holdings in common adding up to 0% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
Largest positions held only by EWJ: 8306 (4.56%), 7203 (3.47%), 6857 (3.12%), 8035 (2.97%), 8316 (2.92%). Only by XLE: XOM (20.03%), CVX (14.84%), COP (6.30%), MPC (5.40%), PSX (5.37%).
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 | EWJ | XLE |
|---|---|---|
| 2022 | -17.7% | +64.3% |
| 2023 | +20.3% | -0.6% |
| 2024 | +7.0% | +5.6% |
| 2025 | +25.8% | +7.9% |
| 2026 | +19.3% | +41.2% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are EWJ and XLE good diversifiers for each other?
By historical standards, yes. A correlation of 0.12 means the two rarely move for the same reasons.
FAQ
What is the correlation between EWJ and XLE?
The EWJ/XLE correlation stands at 0.12 on a 3-year window (1 year: -0.27, 5 years: 0.19), computed from weekly returns as of 2026-08-27.
Is XLE a good diversifier for EWJ?
By historical standards, yes. A correlation of 0.12 means the two rarely move for the same reasons.
How much do EWJ and XLE overlap?
The two funds share 0 holdings amounting to 0% of weight, per issuer portfolio files dated 2026-08-26.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/ewj-vs-xle.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/ewj-vs-xle/)
Free with attribution; caching and terms are described in the API documentation.
Related comparisons
Hubs: EWJ correlations · XLE correlations
