RF vs XLF: Correlation
Regions Financial Corporation (RF) and Financial Select Sector SPDR Fund (XLF) show a strong relationship: their 3-year correlation of weekly returns is 0.77.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are RF and XLF?
Over the past 3 years, RF and XLF moved with a correlation of 0.77, which is strong. The relationship has been stable: the 1-year correlation (0.73) sits close to the 3-year figure. Over 5 years the correlation is 0.78, and the annualized covariance of weekly returns is 365.3 %².
Within RF's tracked universe of 44 assets, XLF comes in at #17 by 3-year correlation. The trailing year gives RF the advantage: +15.4% versus +9.3%, a 6.1-point spread. Stability stands out here, with the rolling one-year correlation confined to 0.67 through 0.88. Note the risk asymmetry: RF runs 1.8 times the annualized volatility of the other leg, so equal-weighting the two is not an equal-risk position.
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.
RF vs XLF: side by side
| RF (Regions Financial Corporation) | XLF (Financial Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +15.4% | +9.3% |
| 5-year return | +83.5% | +64.2% |
| Volatility (ann.) | 29.2% | 16.2% |
| Beta vs S&P 500 | 1.09 | 0.84 |
| Max drawdown (3Y) | -31.9% | -15.5% |
| Market cap | $25.9B | – |
| P/E (trailing) | 12.4 | – |
| Dividend yield | 3.45% | 1.42% |
| Expense ratio | – | 0.08% |
| Assets under management | – | $57.9B |
| Sector / category | Financials | Sector ETF |
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.
Year-by-year returns
| Year | RF | XLF |
|---|---|---|
| 2022 | +2.3% | -10.6% |
| 2023 | -5.7% | +12.0% |
| 2024 | +27.0% | +30.6% |
| 2025 | +20.2% | +14.9% |
| 2026 | +14.3% | +6.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Fund exposure
RF represents 0.32% of XLF's portfolio, so part of any move in XLF is RF itself, and the correlation between them is partly mechanical.
Are RF and XLF good diversifiers for each other?
Somewhat, no more. With 0.77 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between RF and XLF?
The RF/XLF correlation stands at 0.77 on a 3-year window (1 year: 0.73, 5 years: 0.78), computed from weekly returns as of 2026-08-27.
Is XLF a good diversifier for RF?
Somewhat, no more. With 0.77 correlation, most large moves hit both names, and the diversification benefit stays modest.
What does a correlation of 0.77 mean?
A reading of 0.77 sits on a scale from −1 (opposite moves) through 0 (unrelated) to +1 (identical moves). Correlation captures direction, not magnitude or performance.
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Related comparisons
Hubs: RF correlations · XLF correlations
