MDY vs XLB: Correlation & Overlap
SPDR S&P MidCap 400 ETF (MDY) and Materials Select Sector SPDR Fund (XLB) show a very strong relationship: their 3-year correlation of weekly returns is 0.81. 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 MDY and XLB?
Over the past 3 years, MDY and XLB moved with a correlation of 0.81, which is very strong, meaning they move nearly in lockstep. The past 12 months show a weaker link (0.71) than the 3-year average (0.81). Over 5 years the correlation is 0.86, and the annualized covariance of weekly returns is 224.6 %².
By 3-year correlation, XLB places #17 of the 359 assets tracked against MDY. Neither side won the trailing year by much: +18.3% against +17.6%. The link looks structural: the rolling one-year correlation barely moved, holding between 0.76 and 0.91.
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.
MDY vs XLB: side by side
| MDY (SPDR S&P MidCap 400 ETF) | XLB (Materials Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +18.3% | +17.6% |
| 5-year return | +47.5% | +36.9% |
| Volatility (ann.) | 16.5% | 16.7% |
| Beta vs S&P 500 | 0.91 | 0.72 |
| Max drawdown (3Y) | -24.0% | -23.2% |
| Dividend yield | 1.02% | 1.68% |
| Expense ratio | 0.23% | 0.08% |
| Assets under management | $26.5B | $8.3B |
| Sector / category | ETF · US Small & Mid Cap | Sector ETF |
MDY, State Street Investment Management's Mid-Cap Blend fund, carries $26.5B under management, 400 holdings, a 0.23% expense ratio, a 1.02% trailing dividend yield. 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.
Portfolio overlap between MDY and XLB
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 MDY: TWLO (0.95%), P (0.94%), ILMN (0.93%), FTI (0.83%), ATI (0.80%). Only by XLB: LIN (12.94%), NEM (8.02%), FCX (6.48%), SHW (4.87%), ECL (4.80%).
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 | MDY | XLB |
|---|---|---|
| 2022 | -13.3% | -12.3% |
| 2023 | +16.1% | +12.5% |
| 2024 | +13.6% | +0.1% |
| 2025 | +7.2% | +9.9% |
| 2026 | +16.4% | +18.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are MDY and XLB good diversifiers for each other?
No: a correlation of 0.81 means MDY and XLB tend to fall together, which is precisely when diversification is supposed to help.
FAQ
What is the correlation between MDY and XLB?
As of 2026-08-27, the correlation of weekly returns between MDY and XLB is 0.81 over 3 years, 0.71 over 1 year and 0.86 over 5 years.
Is XLB a good diversifier for MDY?
No: a correlation of 0.81 means MDY and XLB tend to fall together, which is precisely when diversification is supposed to help.
How much do MDY and XLB 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/mdy-vs-xlb.json
Embed this badge (it refreshes with the data), with attribution:
[](https://www.pairbook.io/pair/mdy-vs-xlb/)
No key needed, free to use. Full endpoint list in the API documentation.
Related comparisons
Hubs: MDY correlations · XLB correlations
