QQQ vs XLB: Correlation & Overlap
How closely do Invesco QQQ Trust (QQQ) and Materials Select Sector SPDR Fund (XLB) trade together? Their weekly returns over three years give a correlation of 0.47, which is moderate. The two funds also share 1.0% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are QQQ and XLB?
Over the past 3 years, QQQ and XLB moved with a correlation of 0.47, which is moderate. The link has loosened recently: the 1-year correlation (0.22) runs below the 3-year figure (0.47). Over 5 years the correlation is 0.60, and the annualized covariance of weekly returns is 154.1 %².
Within QQQ's tracked universe of 4755 assets, XLB comes in at #369 by 3-year correlation. The trailing year gives QQQ the advantage: +26.3% versus +17.6%, a 8.7-point spread. The rolling one-year correlation moved between 0.23 and 0.72 over the past three years, a moderate range.
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.
QQQ vs XLB: side by side
| QQQ (Invesco QQQ Trust) | XLB (Materials Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +26.3% | +17.6% |
| 5-year return | +95.4% | +36.9% |
| Volatility (ann.) | 19.6% | 16.7% |
| Beta vs S&P 500 | 1.28 | 0.72 |
| Max drawdown (3Y) | -22.8% | -23.2% |
| Dividend yield | 0.44% | 1.68% |
| Expense ratio | 0.18% | 0.08% |
| Assets under management | $452.8B | $8.3B |
| Sector / category | ETF · US Growth & Tech | Sector ETF |
On the fund side, QQQ sits in the Large Growth category at Invesco, with $452.8B under management, 104 holdings, a 0.18% expense ratio, a 0.44% 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 QQQ and XLB
The two portfolios are largely distinct: 1.0% of the funds' weight sits in the same underlying holdings (1 common positions). Correlation tells you they move together; overlap tells you why.
| Common holding | Weight in QQQ | Weight in XLB |
|---|---|---|
| LIN | 1.01% | 12.94% |
Largest positions held only by QQQ: NVDA (8.15%), AAPL (7.39%), MSFT (5.93%), MU (4.69%), AMZN (4.50%). Only by XLB: NEM (8.02%), FCX (6.48%), SHW (4.87%), ECL (4.80%), CTVA (4.72%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26. Top 1 common positions shown.
Year-by-year returns
| Year | QQQ | XLB |
|---|---|---|
| 2022 | -32.6% | -12.3% |
| 2023 | +54.9% | +12.5% |
| 2024 | +25.6% | +0.1% |
| 2025 | +20.8% | +9.9% |
| 2026 | +17.7% | +18.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are QQQ and XLB good diversifiers for each other?
A fair diversifier. At 0.47, enough of each asset's movement is its own that the pair has smoothed outcomes historically.
FAQ
What is the correlation between QQQ and XLB?
The QQQ/XLB correlation stands at 0.47 on a 3-year window (1 year: 0.22, 5 years: 0.60), computed from weekly returns as of 2026-08-27.
Is XLB a good diversifier for QQQ?
A fair diversifier. At 0.47, enough of each asset's movement is its own that the pair has smoothed outcomes historically.
How much do QQQ and XLB overlap?
Per the issuers' own portfolio disclosures (2026-08-26), the overlap is 1.0% by weight over 1 common positions.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/qqq-vs-xlb.json
Embed this badge (it refreshes with the data), with attribution:
[](https://www.pairbook.io/pair/qqq-vs-xlb/)
No key needed, free to use. Full endpoint list in the API documentation.
Related comparisons
Hubs: QQQ correlations · XLB correlations
