PEP vs XLP: Correlation
How closely do PepsiCo (PEP) and Consumer Staples Select Sector SPDR Fund (XLP) trade together? Their weekly returns over three years give a correlation of 0.68, which is strong.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are PEP and XLP?
On 3 years of weekly data the PEP/XLP correlation comes out at 0.68, strong. Little has changed lately, as the 1-year reading of 0.69 lands near the 3-year figure. The 5-year figure is 0.73, and annualized covariance runs at 143.7 %².
Few assets follow PEP as closely as XLP, which ranks #1 of 38 tracked partners. The trailing year gives XLP the advantage: -1.6% versus +8.3%, a 9.9-point spread. On a rolling one-year basis the correlation drifted between 0.54 and 0.87, a moderate band. Risk is not evenly split, since PEP carries 1.7 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.
PEP vs XLP: side by side
| PEP (PepsiCo) | XLP (Consumer Staples Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | -1.6% | +8.3% |
| 5-year return | +4.9% | +34.7% |
| Volatility (ann.) | 19.1% | 11.1% |
| Beta vs S&P 500 | 0.13 | 0.23 |
| Max drawdown (3Y) | -27.5% | -9.7% |
| Market cap | $190.9B | – |
| P/E (trailing) | 18.6 | – |
| Dividend yield | 4.04% | 2.58% |
| Expense ratio | – | 0.08% |
| Assets under management | – | $14.6B |
| Sector / category | Consumer Staples | Sector ETF |
On the fund side, XLP sits in the Consumer Defensive category at State Street Investment Management, with $14.6B under management, 35 holdings, a 0.08% expense ratio, a 2.58% trailing dividend yield.
Year-by-year returns
| Year | PEP | XLP |
|---|---|---|
| 2022 | +6.8% | -0.8% |
| 2023 | -3.3% | -0.8% |
| 2024 | -7.6% | +12.2% |
| 2025 | -1.8% | +1.5% |
| 2026 | -0.7% | +10.9% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Fund exposure
PEP represents 4.39% of XLP's portfolio, so part of any move in XLP is PEP itself, and the correlation between them is partly mechanical.
Are PEP and XLP good diversifiers for each other?
To a limited degree. At 0.68 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
FAQ
What is the correlation between PEP and XLP?
Using weekly returns as of 2026-08-27: 0.68 over 3 years, with 0.69 over the last year and 0.73 over 5 years.
Is XLP a good diversifier for PEP?
To a limited degree. At 0.68 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
What does a correlation of 0.68 mean?
Correlation ranges from −1 to +1. Values near +1 mean two assets move together, near 0 that they move independently, and negative values that they tend to move in opposite directions. It measures co-movement, not performance.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/pep-vs-xlp.json
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[](https://www.pairbook.io/pair/pep-vs-xlp/)
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Related comparisons
Hubs: PEP correlations · XLP correlations
