FANG vs XLE: Correlation
Measured on weekly returns over the past three years, Diamondback Energy (FANG) and Energy Select Sector SPDR Fund (XLE) carry a correlation of 0.83, a very strong link.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are FANG and XLE?
Across a 3-year window, the weekly returns of FANG and XLE correlate at 0.83, very strong, meaning they move nearly in lockstep. The relationship has been stable: the 1-year correlation (0.86) sits close to the 3-year figure. Stretching to 5 years gives 0.88, with an annualized covariance of 653.9 %².
Within FANG's tracked universe of 41 assets, XLE comes in at #5 by 3-year correlation. Neither side won the trailing year by much: +39.6% against +44.0%. On a rolling one-year basis the correlation drifted between 0.68 and 0.95, 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.
FANG vs XLE: side by side
| FANG (Diamondback Energy) | XLE (Energy Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +39.6% | +44.0% |
| 5-year return | +224.9% | +206.7% |
| Volatility (ann.) | 34.1% | 23.1% |
| Beta vs S&P 500 | 0.32 | 0.27 |
| Max drawdown (3Y) | -42.1% | -20.1% |
| Market cap | $56.1B | – |
| P/E (trailing) | 38.0 | – |
| Dividend yield | 2.13% | 2.55% |
| Expense ratio | – | 0.08% |
| Assets under management | – | $39.2B |
| Sector / category | Energy | Sector ETF |
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.
Year-by-year returns
| Year | FANG | XLE |
|---|---|---|
| 2022 | +35.3% | +64.3% |
| 2023 | +19.7% | -0.6% |
| 2024 | +10.3% | +5.6% |
| 2025 | -5.6% | +7.9% |
| 2026 | +35.7% | +41.2% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Fund exposure
Keep in mind that XLE holds FANG at a 2.3% weight, which makes a slice of this correlation mechanical rather than coincidental.
Are FANG and XLE good diversifiers for each other?
Not really. At 0.83, the two trade almost as one position, and owning both buys little extra protection.
FAQ
What is the correlation between FANG and XLE?
Using weekly returns as of 2026-08-27: 0.83 over 3 years, with 0.86 over the last year and 0.88 over 5 years.
Is XLE a good diversifier for FANG?
Not really. At 0.83, the two trade almost as one position, and owning both buys little extra protection.
What does a correlation of 0.83 mean?
A reading of 0.83 sits on a scale from −1 (opposite moves) through 0 (unrelated) to +1 (identical moves). Correlation captures direction, not magnitude or performance.
Use this data
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Related comparisons
Hubs: FANG correlations · XLE correlations
