MRK vs XLV: Correlation
Measured on weekly returns over the past three years, Merck & Co. (MRK) and Health Care Select Sector SPDR Fund (XLV) carry a correlation of 0.70, a strong link.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are MRK and XLV?
Across a 3-year window, the weekly returns of MRK and XLV correlate at 0.70, strong. The past 12 months show a tighter link (0.82) than the 3-year average (0.70). Stretching to 5 years gives 0.58, with an annualized covariance of 289.1 %².
Few assets follow MRK as closely as XLV, which ranks #1 of 34 tracked partners. Correlation aside, the last 12 months split them widely, with MRK ahead by 56.3 points (+83.8% versus +27.5%). On a rolling one-year basis the correlation drifted between 0.40 and 0.83, a moderate band. Risk is not evenly split, since MRK carries 1.9 times the volatility of the other side.
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.
MRK vs XLV: side by side
| MRK (Merck & Co.) | XLV (Health Care Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +83.8% | +27.5% |
| 5-year return | +128.5% | +37.4% |
| Volatility (ann.) | 27.9% | 14.7% |
| Beta vs S&P 500 | 0.28 | 0.42 |
| Max drawdown (3Y) | -43.4% | -17.1% |
| Market cap | $368.9B | – |
| P/E (trailing) | 121.6 | – |
| Dividend yield | 2.17% | 1.56% |
| Expense ratio | – | 0.08% |
| Assets under management | – | $41.7B |
| Sector / category | Health Care | Sector ETF |
On the fund side, XLV sits in the Health category at State Street Investment Management, with $41.7B under management, 61 holdings, a 0.08% expense ratio, a 1.56% trailing dividend yield.
Year-by-year returns
| Year | MRK | XLV |
|---|---|---|
| 2022 | +49.4% | -2.1% |
| 2023 | +1.0% | +2.1% |
| 2024 | -6.3% | +2.5% |
| 2025 | +9.8% | +14.5% |
| 2026 | +44.1% | +11.8% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Fund exposure
Keep in mind that XLV holds MRK at a 6.04% weight, which makes a slice of this correlation mechanical rather than coincidental.
Are MRK and XLV good diversifiers for each other?
Somewhat, no more. With 0.70 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between MRK and XLV?
Using weekly returns as of 2026-08-27: 0.70 over 3 years, with 0.82 over the last year and 0.58 over 5 years.
Is XLV a good diversifier for MRK?
Somewhat, no more. With 0.70 correlation, most large moves hit both names, and the diversification benefit stays modest.
What does a correlation of 0.70 mean?
On the −1 to +1 scale, 0.70 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/mrk-vs-xlv.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/mrk-vs-xlv/)
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Related comparisons
Hubs: MRK correlations · XLV correlations
