EWJ vs XLRE: Correlation & Overlap
Measured on weekly returns over the past three years, iShares MSCI Japan ETF (EWJ) and Real Estate Select Sector SPDR Fund (XLRE) carry a correlation of 0.43, a moderate 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 XLRE?
Across a 3-year window, the weekly returns of EWJ and XLRE correlate at 0.43, moderate. The relationship has been stable: the 1-year correlation (0.33) sits close to the 3-year figure. Stretching to 5 years gives 0.49, with an annualized covariance of 139.6 %².
Among the 70 assets we track against EWJ, XLRE ranks #51 by 3-year correlation. Their recent paths diverged sharply: over the last 12 months EWJ outperformed by 17.6 percentage points (+27.1% for EWJ against +9.5% for XLRE). The rolling one-year correlation moved between 0.29 and 0.76 over the past three years, a moderate range.
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 XLRE: side by side
| EWJ (iShares MSCI Japan ETF) | XLRE (Real Estate Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +27.1% | +9.5% |
| 5-year return | +58.6% | +11.4% |
| Volatility (ann.) | 19.6% | 16.7% |
| Beta vs S&P 500 | 0.94 | 0.57 |
| Max drawdown (3Y) | -14.7% | -16.6% |
| Dividend yield | 3.86% | 3.12% |
| Expense ratio | 0.49% | 0.08% |
| Assets under management | $21.8B | $8.6B |
| Sector / category | ETF · International | Sector ETF |
On the fund side, EWJ sits in the Japan Stock category at iShares, with $21.8B under management, 168 holdings, a 0.49% expense ratio, a 3.86% trailing dividend yield. On the fund side, XLRE sits in the Real Estate category at State Street Investment Management, with $8.6B under management, 31 holdings, a 0.08% expense ratio, a 3.12% trailing dividend yield.
Portfolio overlap between EWJ and XLRE
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 EWJ: 8306 (4.56%), 7203 (3.47%), 6857 (3.12%), 8035 (2.97%), 8316 (2.92%). Only by XLRE: WELL (11.43%), PLD (9.06%), EQIX (7.14%), AMT (5.49%), DLR (5.01%).
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 | XLRE |
|---|---|---|
| 2022 | -17.7% | -26.2% |
| 2023 | +20.3% | +12.4% |
| 2024 | +7.0% | +5.1% |
| 2025 | +25.8% | +2.6% |
| 2026 | +19.3% | +12.4% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are EWJ and XLRE good diversifiers for each other?
Yes, to a useful degree: a correlation of 0.43 leaves real independence between the two, which historically damped combined volatility.
FAQ
What is the correlation between EWJ and XLRE?
Using weekly returns as of 2026-08-27: 0.43 over 3 years, with 0.33 over the last year and 0.49 over 5 years.
Is XLRE a good diversifier for EWJ?
Yes, to a useful degree: a correlation of 0.43 leaves real independence between the two, which historically damped combined volatility.
How much do EWJ and XLRE 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 · XLRE correlations
