ITW vs XLB: Correlation
Measured on weekly returns over the past three years, Illinois Tool Works (ITW) and Materials Select Sector SPDR Fund (XLB) carry a correlation of 0.69, a strong link.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are ITW and XLB?
On 3 years of weekly data the ITW/XLB correlation comes out at 0.69, strong. Lately the two have drifted apart, with the 1-year correlation at 0.56 versus 0.69 over 3 years. The 5-year figure is 0.70, and annualized covariance runs at 221.5 %².
By 3-year correlation, XLB places #14 of the 81 assets tracked against ITW. The trailing year gives XLB the advantage: +8.2% versus +17.6%, a 9.4-point spread. The link looks structural: the rolling one-year correlation barely moved, holding between 0.59 and 0.80.
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.
ITW vs XLB: side by side
| ITW (Illinois Tool Works) | XLB (Materials Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +8.2% | +17.6% |
| 5-year return | +36.1% | +36.9% |
| Volatility (ann.) | 19.0% | 16.7% |
| Beta vs S&P 500 | 0.64 | 0.72 |
| Max drawdown (3Y) | -20.6% | -23.2% |
| Market cap | $80.2B | – |
| P/E (trailing) | 25.8 | – |
| Dividend yield | 2.26% | 1.68% |
| Expense ratio | – | 0.08% |
| Assets under management | – | $8.3B |
| Sector / category | Industrials | Sector ETF |
XLB is a Natural Resources fund from State Street Investment Management: $8.3B under management, 26 holdings, a 0.08% expense ratio, a 1.68% trailing dividend yield.
Year-by-year returns
| Year | ITW | XLB |
|---|---|---|
| 2022 | -8.5% | -12.3% |
| 2023 | +21.6% | +12.5% |
| 2024 | -1.0% | +0.1% |
| 2025 | -0.4% | +9.9% |
| 2026 | +15.8% | +18.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are ITW and XLB good diversifiers for each other?
Somewhat, no more. With 0.69 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between ITW and XLB?
As of 2026-08-27, the correlation of weekly returns between ITW and XLB is 0.69 over 3 years, 0.56 over 1 year and 0.70 over 5 years.
Is XLB a good diversifier for ITW?
Somewhat, no more. With 0.69 correlation, most large moves hit both names, and the diversification benefit stays modest.
What does a correlation of 0.69 mean?
A reading of 0.69 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
$ curl https://www.pairbook.io/api/v1/pairs/itw-vs-xlb.json
Embed this badge (it refreshes with the data), with attribution:
[](https://www.pairbook.io/pair/itw-vs-xlb/)
No key needed, free to use. Full endpoint list in the API documentation.
Related comparisons
Hubs: ITW correlations · XLB correlations
