IWM vs XLK: Correlation & Overlap
How closely do iShares Russell 2000 ETF (IWM) and Technology Select Sector SPDR Fund (XLK) trade together? Their weekly returns over three years give a correlation of 0.63, which is strong. By holdings, the two funds overlap 0% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are IWM and XLK?
On 3 years of weekly data the IWM/XLK correlation comes out at 0.63, strong. Recent behaviour matches the longer record: 0.62 over 1 year against 0.63 over 3. The 5-year figure is 0.70, and annualized covariance runs at 300.6 %².
Within IWM's tracked universe of 320 assets, XLK comes in at #92 by 3-year correlation. The last year tells two different stories: XLK led by 15.0 percentage points, +28.4% for IWM against +43.4% for XLK. Across three years, the rolling one-year figure varied moderately, from 0.43 to 0.81.
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 XLK: side by side
| IWM (iShares Russell 2000 ETF) | XLK (Technology Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +28.4% | +43.4% |
| 5-year return | +41.5% | +145.2% |
| Volatility (ann.) | 19.8% | 24.0% |
| Beta vs S&P 500 | 1.06 | 1.50 |
| Max drawdown (3Y) | -27.5% | -25.7% |
| Dividend yield | 0.91% | 0.45% |
| Expense ratio | 0.19% | 0.08% |
| Assets under management | $80.1B | $115.4B |
| Sector / category | ETF · US Small & Mid Cap | Sector ETF |
IWM is a Small Blend fund from iShares: $80.1B under management, 1757 holdings, a 0.19% expense ratio, a 0.91% trailing dividend yield. On the fund side, XLK sits in the Technology category at State Street Investment Management, with $115.4B under management, 73 holdings, a 0.08% expense ratio, a 0.45% trailing dividend yield.
Portfolio overlap between IWM and XLK
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 XLK: NVDA (13.91%), AAPL (12.61%), MSFT (10.10%), AVGO (4.61%), AMD (4.09%).
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 | XLK |
|---|---|---|
| 2022 | -20.5% | -27.7% |
| 2023 | +16.8% | +56.0% |
| 2024 | +11.4% | +21.6% |
| 2025 | +12.7% | +24.6% |
| 2026 | +22.3% | +31.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are IWM and XLK good diversifiers for each other?
Only partially. A correlation of 0.63 means IWM and XLK 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 IWM and XLK?
Using weekly returns as of 2026-08-27: 0.63 over 3 years, with 0.62 over the last year and 0.70 over 5 years.
Is XLK a good diversifier for IWM?
Only partially. A correlation of 0.63 means IWM and XLK share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
How much do IWM and XLK overlap?
The two funds share 0 holdings amounting to 0% of weight, per issuer portfolio files dated 2026-08-26.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/iwm-vs-xlk.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/iwm-vs-xlk/)
The core API is free. Terms and every endpoint in the API documentation.
Related comparisons
Hubs: IWM correlations · XLK correlations
