EWJ vs XLK: Correlation & Overlap
How closely do iShares MSCI Japan ETF (EWJ) and Technology Select Sector SPDR Fund (XLK) trade together? Their weekly returns over three years give a correlation of 0.61, which is strong. 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 XLK?
On 3 years of weekly data the EWJ/XLK correlation comes out at 0.61, strong. The relationship has been stable: the 1-year correlation (0.58) sits close to the 3-year figure. The 5-year figure is 0.65, and annualized covariance runs at 287.7 %².
Among the 70 assets we track against EWJ, XLK ranks #39 by 3-year correlation. Correlation aside, the last 12 months split them widely, with XLK ahead by 16.3 points (+27.1% versus +43.4%). Across three years, the rolling one-year figure varied moderately, from 0.42 to 0.74.
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 XLK: side by side
| EWJ (iShares MSCI Japan ETF) | XLK (Technology Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +27.1% | +43.4% |
| 5-year return | +58.6% | +145.2% |
| Volatility (ann.) | 19.6% | 24.0% |
| Beta vs S&P 500 | 0.94 | 1.50 |
| Max drawdown (3Y) | -14.7% | -25.7% |
| Dividend yield | 3.86% | 0.45% |
| Expense ratio | 0.49% | 0.08% |
| Assets under management | $21.8B | $115.4B |
| 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. 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 EWJ and XLK
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 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.
Year-by-year returns
| Year | EWJ | XLK |
|---|---|---|
| 2022 | -17.7% | -27.7% |
| 2023 | +20.3% | +56.0% |
| 2024 | +7.0% | +21.6% |
| 2025 | +25.8% | +24.6% |
| 2026 | +19.3% | +31.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are EWJ and XLK good diversifiers for each other?
To a limited degree. At 0.61 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 EWJ and XLK?
As of 2026-08-27, the correlation of weekly returns between EWJ and XLK is 0.61 over 3 years, 0.58 over 1 year and 0.65 over 5 years.
Is XLK a good diversifier for EWJ?
To a limited degree. At 0.61 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 EWJ and XLK overlap?
Per the issuers' own portfolio disclosures (2026-08-26), the overlap is 0% by weight over 0 common positions.
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Related comparisons
Hubs: EWJ correlations · XLK correlations
