QQQ vs XLC: Correlation & Overlap
Measured on weekly returns over the past three years, Invesco QQQ Trust (QQQ) and Communication Services Select Sector SPDR Fund (XLC) carry a correlation of 0.77, a strong link. The two funds also share 12.7% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are QQQ and XLC?
On 3 years of weekly data the QQQ/XLC correlation comes out at 0.77, strong. Little has changed lately, as the 1-year reading of 0.67 lands near the 3-year figure. The 5-year figure is 0.82, and annualized covariance runs at 240.7 %².
Within QQQ's tracked universe of 4755 assets, XLC comes in at #41 by 3-year correlation. Correlation aside, the last 12 months split them widely, with QQQ ahead by 24.8 points (+26.3% versus +1.5%). The rolling one-year correlation moved between 0.65 and 0.90 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 XLC: side by side
| QQQ (Invesco QQQ Trust) | XLC (Communication Services Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +26.3% | +1.5% |
| 5-year return | +95.4% | +37.5% |
| Volatility (ann.) | 19.6% | 16.0% |
| Beta vs S&P 500 | 1.28 | 0.90 |
| Max drawdown (3Y) | -22.8% | -18.0% |
| Dividend yield | 0.44% | 1.32% |
| Expense ratio | 0.18% | 0.08% |
| Assets under management | $452.8B | $21.7B |
| Sector / category | ETF · US Growth & Tech | Sector ETF |
QQQ is a Large Growth fund from Invesco: $452.8B under management, 104 holdings, a 0.18% expense ratio, a 0.44% trailing dividend yield. On the fund side, XLC sits in the Communications category at State Street Investment Management, with $21.7B under management, 24 holdings, a 0.08% expense ratio, a 1.32% trailing dividend yield.
Portfolio overlap between QQQ and XLC
The two portfolios are largely distinct. Weighing the shared positions, 12.7% of the two funds is identical, spread across 9 common holdings. That shared book is a large part of why the returns line up.
| Common holding | Weight in QQQ | Weight in XLC |
|---|---|---|
| GOOGL | 3.20% | 10.29% |
| GOOG | 2.97% | 8.22% |
| META | 2.74% | 16.73% |
| NFLX | 1.52% | 4.84% |
| TMUS | 0.86% | 4.53% |
| CMCSA | 0.43% | 4.93% |
| APP | 0.42% | 1.30% |
| WBD | 0.32% | 4.65% |
| TTWO | 0.19% | 4.14% |
Largest positions held only by QQQ: NVDA (8.15%), AAPL (7.39%), MSFT (5.93%), MU (4.69%), AMZN (4.50%). Only by XLC: T (5.20%), VZ (4.99%), DIS (4.88%), OMC (4.52%), LYV (4.39%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26. Top 9 common positions shown.
Year-by-year returns
| Year | QQQ | XLC |
|---|---|---|
| 2022 | -32.6% | -37.6% |
| 2023 | +54.9% | +52.8% |
| 2024 | +25.6% | +34.7% |
| 2025 | +20.8% | +23.1% |
| 2026 | +17.7% | -4.8% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are QQQ and XLC good diversifiers for each other?
To a limited degree. At 0.77 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 QQQ and XLC?
As of 2026-08-27, the correlation of weekly returns between QQQ and XLC is 0.77 over 3 years, 0.67 over 1 year and 0.82 over 5 years.
Is XLC a good diversifier for QQQ?
To a limited degree. At 0.77 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
How much do QQQ and XLC overlap?
Per the issuers' own portfolio disclosures (2026-08-26), the overlap is 12.7% by weight over 9 common positions.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/qqq-vs-xlc.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/qqq-vs-xlc/)
The core API is free. Terms and every endpoint in the API documentation.
Related comparisons
Hubs: QQQ correlations · XLC correlations
