NDAQ vs XLF: Correlation
Nasdaq, Inc. (NDAQ) and Financial Select Sector SPDR Fund (XLF) show a moderate relationship: their 3-year correlation of weekly returns is 0.54.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are NDAQ and XLF?
Over the past 3 years, NDAQ and XLF moved with a correlation of 0.54, which is moderate. Lately the two have drifted apart, with the 1-year correlation at 0.33 versus 0.54 over 3 years. Over 5 years the correlation is 0.57, and the annualized covariance of weekly returns is 202.4 %².
Among the 35 assets we track against NDAQ, XLF ranks #11 by 3-year correlation. Their 12-month results are close: +6.1% for NDAQ against +9.3% for XLF. Do not treat this figure as fixed: across three years the rolling one-year correlation ranged all the way from 0.32 to 0.84.
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.
NDAQ vs XLF: side by side
| NDAQ (Nasdaq, Inc.) | XLF (Financial Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +6.1% | +9.3% |
| 5-year return | +64.4% | +64.2% |
| Volatility (ann.) | 23.2% | 16.2% |
| Beta vs S&P 500 | 0.80 | 0.84 |
| Max drawdown (3Y) | -23.4% | -15.5% |
| Market cap | $55.5B | – |
| P/E (trailing) | 29.0 | – |
| Dividend yield | 1.13% | 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 | NDAQ | XLF |
|---|---|---|
| 2022 | -11.2% | -10.6% |
| 2023 | -3.7% | +12.0% |
| 2024 | +34.8% | +30.6% |
| 2025 | +27.2% | +14.9% |
| 2026 | +3.0% | +6.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Fund exposure
A structural note: 0.54% of XLF is NDAQ itself, so the fund partly moves with the stock by construction.
Are NDAQ and XLF good diversifiers for each other?
Only partially. A correlation of 0.54 means NDAQ and XLF 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 NDAQ and XLF?
The NDAQ/XLF correlation stands at 0.54 on a 3-year window (1 year: 0.33, 5 years: 0.57), computed from weekly returns as of 2026-08-27.
Is XLF a good diversifier for NDAQ?
Only partially. A correlation of 0.54 means NDAQ and XLF share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
What does a correlation of 0.54 mean?
On the −1 to +1 scale, 0.54 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.
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Related comparisons
Hubs: NDAQ correlations · XLF correlations
