MSM vs XLI: Correlation
MSC Industrial Direct Company, Inc. (MSM) and Industrial Select Sector SPDR Fund (XLI) show a strong relationship: their 3-year correlation of weekly returns is 0.64.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are MSM and XLI?
On 3 years of weekly data the MSM/XLI correlation comes out at 0.64, strong. The link has loosened recently: the 1-year correlation (0.47) runs below the 3-year figure (0.64). The 5-year figure is 0.67, and annualized covariance runs at 255.9 %².
Few assets follow MSM as closely as XLI, which ranks #3 of 17 tracked partners. Correlation aside, the last 12 months split them widely, with MSM ahead by 19.8 points (+38.1% versus +18.3%). Note the risk asymmetry: MSM runs 1.6 times the annualized volatility of the other leg, so equal-weighting the two is not an equal-risk position.
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.
MSM vs XLI: side by side
| MSM (MSC Industrial Direct Company, Inc.) | XLI (Industrial Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +38.1% | +18.3% |
| 5-year return | +73.8% | +84.0% |
| Volatility (ann.) | 25.3% | 15.7% |
| Beta vs S&P 500 | 0.78 | 0.89 |
| Max drawdown (3Y) | -29.3% | -18.5% |
| Market cap | – | – |
| P/E (trailing) | 29.6 | – |
| Dividend yield | 2.84% | 1.15% |
| Expense ratio | – | 0.08% |
| Assets under management | – | $32.9B |
| Sector / category | US Listed | Sector ETF |
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.
Year-by-year returns
| Year | MSM | XLI |
|---|---|---|
| 2022 | +0.9% | -5.6% |
| 2023 | +28.5% | +18.1% |
| 2024 | -23.4% | +17.3% |
| 2025 | +17.4% | +19.3% |
| 2026 | +49.1% | +15.9% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are MSM and XLI good diversifiers for each other?
Somewhat, no more. With 0.64 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between MSM and XLI?
As of 2026-08-27, the correlation of weekly returns between MSM and XLI is 0.64 over 3 years, 0.47 over 1 year and 0.67 over 5 years.
Is XLI a good diversifier for MSM?
Somewhat, no more. With 0.64 correlation, most large moves hit both names, and the diversification benefit stays modest.
What does a correlation of 0.64 mean?
A reading of 0.64 sits on a scale from −1 (opposite moves) through 0 (unrelated) to +1 (identical moves). Correlation captures direction, not magnitude or performance.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/msm-vs-xli.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/msm-vs-xli/)
No key needed, free to use. Full endpoint list in the API documentation.
Related comparisons
Hubs: MSM correlations · XLI correlations
