ITW vs XLI: Correlation
Illinois Tool Works (ITW) and Industrial Select Sector SPDR Fund (XLI) show a strong relationship: their 3-year correlation of weekly returns is 0.71.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are ITW and XLI?
Across a 3-year window, the weekly returns of ITW and XLI correlate at 0.71, strong. Little has changed lately, as the 1-year reading of 0.68 lands near the 3-year figure. Stretching to 5 years gives 0.77, with an annualized covariance of 211.9 %².
Among the 81 assets we track against ITW, XLI ranks #5 by 3-year correlation. Over the last 12 months XLI came out ahead by 10.1 percentage points (+8.2% against +18.3%). The rolling one-year correlation stayed in a tight band between 0.64 and 0.86 over the past three years, which points to a structural rather than episodic relationship.
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 XLI: side by side
| ITW (Illinois Tool Works) | XLI (Industrial Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +8.2% | +18.3% |
| 5-year return | +36.1% | +84.0% |
| Volatility (ann.) | 19.0% | 15.7% |
| Beta vs S&P 500 | 0.64 | 0.89 |
| Max drawdown (3Y) | -20.6% | -18.5% |
| Market cap | $80.2B | – |
| P/E (trailing) | 25.8 | – |
| Dividend yield | 2.26% | 1.15% |
| Expense ratio | – | 0.08% |
| Assets under management | – | $32.9B |
| Sector / category | Industrials | Sector ETF |
XLI is an Industrials fund from State Street Investment Management: $32.9B under management, 83 holdings, a 0.08% expense ratio, a 1.15% trailing dividend yield.
Year-by-year returns
| Year | ITW | XLI |
|---|---|---|
| 2022 | -8.5% | -5.6% |
| 2023 | +21.6% | +18.1% |
| 2024 | -1.0% | +17.3% |
| 2025 | -0.4% | +19.3% |
| 2026 | +15.8% | +15.9% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Fund exposure
A structural note: 1.32% of XLI is ITW itself, so the fund partly moves with the stock by construction.
Are ITW and XLI good diversifiers for each other?
Somewhat, no more. With 0.71 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between ITW and XLI?
As of 2026-08-27, the correlation of weekly returns between ITW and XLI is 0.71 over 3 years, 0.68 over 1 year and 0.77 over 5 years.
Is XLI a good diversifier for ITW?
Somewhat, no more. With 0.71 correlation, most large moves hit both names, and the diversification benefit stays modest.
What does a correlation of 0.71 mean?
On the −1 to +1 scale, 0.71 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.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/itw-vs-xli.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/itw-vs-xli/)
No key needed, free to use. Full endpoint list in the API documentation.
Related comparisons
Hubs: ITW correlations · XLI correlations
