EWJ vs XLY: Correlation & Overlap
Measured on weekly returns over the past three years, iShares MSCI Japan ETF (EWJ) and Consumer Discretionary Select Sector SPDR Fund (XLY) carry a correlation of 0.57, a moderate link. Looking through to holdings, 0% 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 EWJ and XLY?
Over the past 3 years, EWJ and XLY moved with a correlation of 0.57, which is moderate. Recent behaviour matches the longer record: 0.49 over 1 year against 0.57 over 3. Over 5 years the correlation is 0.60, and the annualized covariance of weekly returns is 221.3 %².
Within EWJ's tracked universe of 70 assets, XLY comes in at #41 by 3-year correlation. Correlation aside, the last 12 months split them widely, with EWJ ahead by 27.2 points (+27.1% versus -0.1%). Stability stands out here, with the rolling one-year correlation confined to 0.51 through 0.73.
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 XLY: side by side
| EWJ (iShares MSCI Japan ETF) | XLY (Consumer Discretionary Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +27.1% | -0.1% |
| 5-year return | +58.6% | +31.8% |
| Volatility (ann.) | 19.6% | 19.7% |
| Beta vs S&P 500 | 0.94 | 1.15 |
| Max drawdown (3Y) | -14.7% | -26.0% |
| Dividend yield | 3.86% | 0.78% |
| Expense ratio | 0.49% | 0.08% |
| Assets under management | $21.8B | $22.5B |
| Sector / category | ETF · International | Sector ETF |
EWJ, iShares's Japan Stock fund, carries $21.8B under management, 168 holdings, a 0.49% expense ratio, a 3.86% 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 EWJ and XLY
The two portfolios are largely distinct: 0% of the funds' weight sits in the same underlying holdings (0 common positions). Correlation tells you they move together; overlap tells you why.
Largest positions held only by EWJ: 8306 (4.56%), 7203 (3.47%), 6857 (3.12%), 8035 (2.97%), 8316 (2.92%). 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.
Year-by-year returns
| Year | EWJ | XLY |
|---|---|---|
| 2022 | -17.7% | -36.3% |
| 2023 | +20.3% | +39.6% |
| 2024 | +7.0% | +26.5% |
| 2025 | +25.8% | +7.4% |
| 2026 | +19.3% | -2.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are EWJ and XLY good diversifiers for each other?
Only partially. A correlation of 0.57 means EWJ and XLY share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
FAQ
What is the correlation between EWJ and XLY?
Using weekly returns as of 2026-08-27: 0.57 over 3 years, with 0.49 over the last year and 0.60 over 5 years.
Is XLY a good diversifier for EWJ?
Only partially. A correlation of 0.57 means EWJ and XLY share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
How much do EWJ and XLY 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-xly.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/ewj-vs-xly/)
Free with attribution; caching and terms are described in the API documentation.
Related comparisons
Hubs: EWJ correlations · XLY correlations
