QQQ vs XLK: Correlation & Overlap
Measured on weekly returns over the past three years, Invesco QQQ Trust (QQQ) and Technology Select Sector SPDR Fund (XLK) carry a correlation of 0.97, a very strong link. Looking through to holdings, 54.5% of the two portfolios is the same by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are QQQ and XLK?
On 3 years of weekly data the QQQ/XLK correlation comes out at 0.97, very strong, meaning they move nearly in lockstep. Recent behaviour matches the longer record: 0.96 over 1 year against 0.97 over 3. The 5-year figure is 0.97, and annualized covariance runs at 455.1 %².
Among the 4755 assets we track against QQQ, XLK ranks #4 by 3-year correlation. Their recent paths diverged sharply: over the last 12 months XLK outperformed by 17.1 percentage points (+26.3% for QQQ against +43.4% for XLK). Stability stands out here, with the rolling one-year correlation confined to 0.95 through 0.98.
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 XLK: side by side
| QQQ (Invesco QQQ Trust) | XLK (Technology Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +26.3% | +43.4% |
| 5-year return | +95.4% | +145.2% |
| Volatility (ann.) | 19.6% | 24.0% |
| Beta vs S&P 500 | 1.28 | 1.50 |
| Max drawdown (3Y) | -22.8% | -25.7% |
| Dividend yield | 0.44% | 0.45% |
| Expense ratio | 0.18% | 0.08% |
| Assets under management | $452.8B | $115.4B |
| 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. On the fund side, XLK sits in the Technology category at State Street Investment Management, with $115.4B under management, 73 holdings, a 0.08% expense ratio, a 0.45% trailing dividend yield.
Portfolio overlap between QQQ and XLK
The two portfolios overlap heavily, with 35 holdings in common adding up to 54.5% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
| Common holding | Weight in QQQ | Weight in XLK |
|---|---|---|
| NVDA | 8.15% | 13.91% |
| AAPL | 7.39% | 12.61% |
| MSFT | 5.93% | 10.10% |
| MU | 4.69% | 3.99% |
| AMD | 3.48% | 4.09% |
| AVGO | 2.71% | 4.61% |
| INTC | 1.97% | 2.92% |
| CSCO | 1.96% | 2.97% |
| PLTR | 1.81% | 2.73% |
| LRCX | 1.73% | 2.62% |
| AMAT | 1.69% | 2.55% |
| PANW | 1.23% | 1.84% |
| KLAC | 1.07% | 1.61% |
| TXN | 1.06% | 1.59% |
| SNDK | 0.98% | 1.49% |
Largest positions held only by QQQ: AMZN (4.50%), GOOGL (3.20%), GOOG (2.97%), TSLA (2.77%), META (2.74%). Only by XLK: ORCL (1.69%), IBM (1.45%), ANET (1.40%), APH (1.33%), CRM (1.13%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26. Top 15 common positions shown.
Year-by-year returns
| Year | QQQ | XLK |
|---|---|---|
| 2022 | -32.6% | -27.7% |
| 2023 | +54.9% | +56.0% |
| 2024 | +25.6% | +21.6% |
| 2025 | +20.8% | +24.6% |
| 2026 | +17.7% | +31.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are QQQ and XLK good diversifiers for each other?
No: a correlation of 0.97 means QQQ and XLK tend to fall together, which is precisely when diversification is supposed to help. The 54.5% holdings overlap makes the redundancy concrete: much of it is the same book twice.
FAQ
What is the correlation between QQQ and XLK?
The QQQ/XLK correlation stands at 0.97 on a 3-year window (1 year: 0.96, 5 years: 0.97), computed from weekly returns as of 2026-08-27.
Is XLK a good diversifier for QQQ?
No: a correlation of 0.97 means QQQ and XLK tend to fall together, which is precisely when diversification is supposed to help. The 54.5% holdings overlap makes the redundancy concrete: much of it is the same book twice.
How much do QQQ and XLK overlap?
Per the issuers' own portfolio disclosures (2026-08-26), the overlap is 54.5% by weight over 35 common positions.
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Hubs: QQQ correlations · XLK correlations
