QQQ vs XLF: Correlation & Overlap
How closely do Invesco QQQ Trust (QQQ) and Financial Select Sector SPDR Fund (XLF) trade together? Their weekly returns over three years give a correlation of 0.56, which is moderate. The two funds also share 0.2% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are QQQ and XLF?
Over the past 3 years, QQQ and XLF moved with a correlation of 0.56, which is moderate. Lately the two have drifted apart, with the 1-year correlation at 0.37 versus 0.56 over 3 years. Over 5 years the correlation is 0.62, and the annualized covariance of weekly returns is 176.6 %².
Among the 4755 assets we track against QQQ, XLF ranks #186 by 3-year correlation. Correlation aside, the last 12 months split them widely, with QQQ ahead by 17.0 points (+26.3% versus +9.3%). The rolling one-year correlation moved between 0.28 and 0.76 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 XLF: side by side
| QQQ (Invesco QQQ Trust) | XLF (Financial Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +26.3% | +9.3% |
| 5-year return | +95.4% | +64.2% |
| Volatility (ann.) | 19.6% | 16.2% |
| Beta vs S&P 500 | 1.28 | 0.84 |
| Max drawdown (3Y) | -22.8% | -15.5% |
| Dividend yield | 0.44% | 1.42% |
| Expense ratio | 0.18% | 0.08% |
| Assets under management | $452.8B | $57.9B |
| Sector / category | ETF · US Growth & Tech | Sector ETF |
QQQ, Invesco's Large Growth fund, carries $452.8B under management, 104 holdings, a 0.18% expense ratio, a 0.44% trailing dividend yield. 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.
Portfolio overlap between QQQ and XLF
The two portfolios are largely distinct. Weighing the shared positions, 0.2% of the two funds is identical, spread across 1 common holdings. That shared book is a large part of why the returns line up.
| Common holding | Weight in QQQ | Weight in XLF |
|---|---|---|
| PYPL | 0.24% | 0.66% |
Largest positions held only by QQQ: NVDA (8.15%), AAPL (7.39%), MSFT (5.93%), MU (4.69%), AMZN (4.50%). Only by XLF: JPM (11.61%), BRK.B (11.25%), V (7.74%), MA (5.87%), BAC (4.94%).
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 | XLF |
|---|---|---|
| 2022 | -32.6% | -10.6% |
| 2023 | +54.9% | +12.0% |
| 2024 | +25.6% | +30.6% |
| 2025 | +20.8% | +14.9% |
| 2026 | +17.7% | +6.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are QQQ and XLF good diversifiers for each other?
To a limited degree. At 0.56 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 XLF?
The QQQ/XLF correlation stands at 0.56 on a 3-year window (1 year: 0.37, 5 years: 0.62), computed from weekly returns as of 2026-08-27.
Is XLF a good diversifier for QQQ?
To a limited degree. At 0.56 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 XLF overlap?
0.2% by weight, across 1 common holdings, based on issuer-disclosed portfolios as of 2026-08-26.
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Hubs: QQQ correlations · XLF correlations
