HIG vs XLF: Correlation
How closely do Hartford (The) (HIG) and Financial Select Sector SPDR Fund (XLF) trade together? Their weekly returns over three years give a correlation of 0.61, which is strong.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are HIG and XLF?
On 3 years of weekly data the HIG/XLF correlation comes out at 0.61, strong. Lately the two have drifted apart, with the 1-year correlation at 0.47 versus 0.61 over 3 years. The 5-year figure is 0.70, and annualized covariance runs at 193.4 %².
Among the 49 assets we track against HIG, XLF ranks #18 by 3-year correlation. Their 12-month results are close: +5.4% for HIG against +9.3% for XLF. Across three years, the rolling one-year figure varied moderately, from 0.45 to 0.79.
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.
HIG vs XLF: side by side
| HIG (Hartford (The)) | XLF (Financial Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +5.4% | +9.3% |
| 5-year return | +127.4% | +64.2% |
| Volatility (ann.) | 19.5% | 16.2% |
| Beta vs S&P 500 | 0.39 | 0.84 |
| Max drawdown (3Y) | -13.7% | -15.5% |
| Market cap | $37.3B | – |
| P/E (trailing) | 9.7 | – |
| Dividend yield | 1.66% | 1.42% |
| Expense ratio | – | 0.08% |
| Assets under management | – | $57.9B |
| Sector / category | Financials | Sector ETF |
XLF is a Financial fund from State Street Investment Management: $57.9B under management, 77 holdings, a 0.08% expense ratio, a 1.42% trailing dividend yield.
Year-by-year returns
| Year | HIG | XLF |
|---|---|---|
| 2022 | +12.3% | -10.6% |
| 2023 | +8.5% | +12.0% |
| 2024 | +38.5% | +30.6% |
| 2025 | +28.1% | +14.9% |
| 2026 | +0.9% | +6.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Fund exposure
Keep in mind that XLF holds HIG at a 0.47% weight, which makes a slice of this correlation mechanical rather than coincidental.
Are HIG and XLF good diversifiers for each other?
Only partially. A correlation of 0.61 means HIG and XLF 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 HIG and XLF?
Using weekly returns as of 2026-08-27: 0.61 over 3 years, with 0.47 over the last year and 0.70 over 5 years.
Is XLF a good diversifier for HIG?
Only partially. A correlation of 0.61 means HIG and XLF share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
What does a correlation of 0.61 mean?
On the −1 to +1 scale, 0.61 describes how much the two returns move together: +1 is lockstep, 0 is independence, negative values mean opposite directions. It says nothing about which performed better.
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Related comparisons
Hubs: HIG correlations · XLF correlations
