IWM vs XLI: Correlation & Overlap
Measured on weekly returns over the past three years, iShares Russell 2000 ETF (IWM) and Industrial Select Sector SPDR Fund (XLI) carry a correlation of 0.81, a very strong link. The two funds also share 0% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are IWM and XLI?
Across a 3-year window, the weekly returns of IWM and XLI correlate at 0.81, very strong, meaning they move nearly in lockstep. Lately the two have drifted apart, with the 1-year correlation at 0.71 versus 0.81 over 3 years. Stretching to 5 years gives 0.84, with an annualized covariance of 252.5 %².
Within IWM's tracked universe of 320 assets, XLI comes in at #17 by 3-year correlation. The trailing year gives IWM the advantage: +28.4% versus +18.3%, a 10.1-point spread. The rolling one-year correlation stayed in a tight band between 0.69 and 0.89 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.
IWM vs XLI: side by side
| IWM (iShares Russell 2000 ETF) | XLI (Industrial Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +28.4% | +18.3% |
| 5-year return | +41.5% | +84.0% |
| Volatility (ann.) | 19.8% | 15.7% |
| Beta vs S&P 500 | 1.06 | 0.89 |
| Max drawdown (3Y) | -27.5% | -18.5% |
| Dividend yield | 0.91% | 1.15% |
| Expense ratio | 0.19% | 0.08% |
| Assets under management | $80.1B | $32.9B |
| Sector / category | ETF · US Small & Mid Cap | Sector ETF |
IWM, iShares's Small Blend fund, carries $80.1B under management, 1757 holdings, a 0.19% expense ratio, a 0.91% trailing dividend yield. 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.
Portfolio overlap between IWM and XLI
The two portfolios are largely distinct, with 0 holdings in common adding up to 0% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
Largest positions held only by IWM: MOGA (0.35%), UMBF (0.34%), CYTK (0.33%), GKOS (0.33%), EAT (0.33%). Only by XLI: CAT (6.68%), GE (6.52%), RTX (5.04%), GEV (4.52%), UNP (3.25%).
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 | IWM | XLI |
|---|---|---|
| 2022 | -20.5% | -5.6% |
| 2023 | +16.8% | +18.1% |
| 2024 | +11.4% | +17.3% |
| 2025 | +12.7% | +19.3% |
| 2026 | +22.3% | +15.9% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are IWM and XLI good diversifiers for each other?
Not really. At 0.81, the two trade almost as one position, and owning both buys little extra protection.
FAQ
What is the correlation between IWM and XLI?
The IWM/XLI correlation stands at 0.81 on a 3-year window (1 year: 0.71, 5 years: 0.84), computed from weekly returns as of 2026-08-27.
Is XLI a good diversifier for IWM?
Not really. At 0.81, the two trade almost as one position, and owning both buys little extra protection.
How much do IWM and XLI overlap?
Per the issuers' own portfolio disclosures (2026-08-26), the overlap is 0% by weight over 0 common positions.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/iwm-vs-xli.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/iwm-vs-xli/)
No key needed, free to use. Full endpoint list in the API documentation.
Related comparisons
Hubs: IWM correlations · XLI correlations
