MCO vs XLF: Correlation
How closely do Moody's Corporation (MCO) and Financial Select Sector SPDR Fund (XLF) trade together? Their weekly returns over three years give a correlation of 0.66, which is strong.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are MCO and XLF?
On 3 years of weekly data the MCO/XLF correlation comes out at 0.66, strong. The past 12 months show a weaker link (0.40) than the 3-year average (0.66). The 5-year figure is 0.66, and annualized covariance runs at 273.1 %².
XLF is one of the assets that tracks MCO most closely: it ranks #3 out of the 53 assets we track against MCO. On 12-month performance XLF holds a 8.6-point edge, +0.7% against +9.3%. Across three years, the rolling one-year figure varied moderately, from 0.41 to 0.90. One caveat on sizing: MCO is 1.6 times as volatile as the other leg, so an equal-dollar split is far from equal-risk.
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.
MCO vs XLF: side by side
| MCO (Moody's Corporation) | XLF (Financial Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +0.7% | +9.3% |
| 5-year return | +39.4% | +64.2% |
| Volatility (ann.) | 25.8% | 16.2% |
| Beta vs S&P 500 | 1.08 | 0.84 |
| Max drawdown (3Y) | -24.7% | -15.5% |
| Market cap | $88.2B | – |
| P/E (trailing) | 32.7 | – |
| Dividend yield | 0.77% | 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 | MCO | XLF |
|---|---|---|
| 2022 | -28.0% | -10.6% |
| 2023 | +41.5% | +12.0% |
| 2024 | +22.2% | +30.6% |
| 2025 | +8.7% | +14.9% |
| 2026 | +0.3% | +6.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Fund exposure
A structural note: 0.94% of XLF is MCO itself, so the fund partly moves with the stock by construction.
Are MCO and XLF good diversifiers for each other?
Somewhat, no more. With 0.66 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between MCO and XLF?
As of 2026-08-27, the correlation of weekly returns between MCO and XLF is 0.66 over 3 years, 0.40 over 1 year and 0.66 over 5 years.
Is XLF a good diversifier for MCO?
Somewhat, no more. With 0.66 correlation, most large moves hit both names, and the diversification benefit stays modest.
What does a correlation of 0.66 mean?
A reading of 0.66 sits on a scale from −1 (opposite moves) through 0 (unrelated) to +1 (identical moves). Correlation captures direction, not magnitude or performance.
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Related comparisons
Hubs: MCO correlations · XLF correlations
