SCHD vs XLB: Correlation & Overlap
How closely do Schwab US Dividend Equity ETF (SCHD) and Materials Select Sector SPDR Fund (XLB) trade together? Their weekly returns over three years give a correlation of 0.75, which is strong. By holdings, the two funds overlap 0% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are SCHD and XLB?
Over the past 3 years, SCHD and XLB moved with a correlation of 0.75, which is strong. The past 12 months show a weaker link (0.55) than the 3-year average (0.75). Over 5 years the correlation is 0.80, and the annualized covariance of weekly returns is 161.8 %².
Within SCHD's tracked universe of 108 assets, XLB comes in at #12 by 3-year correlation. On 12-month performance SCHD holds a 12.0-point edge, +29.6% against +17.6%. On a rolling one-year basis the correlation drifted between 0.56 and 0.86, a moderate band.
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.
SCHD vs XLB: side by side
| SCHD (Schwab US Dividend Equity ETF) | XLB (Materials Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +29.6% | +17.6% |
| 5-year return | +60.9% | +36.9% |
| Volatility (ann.) | 12.9% | 16.7% |
| Beta vs S&P 500 | 0.52 | 0.72 |
| Max drawdown (3Y) | -16.1% | -23.2% |
| Dividend yield | 3.13% | 1.68% |
| Expense ratio | 0.06% | 0.08% |
| Assets under management | $104.2B | $8.3B |
| Sector / category | ETF · Dividend | Sector ETF |
SCHD is a Large Value fund from Schwab ETFs: $104.2B under management, 101 holdings, a 0.06% expense ratio, a 3.13% 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 SCHD and XLB
The two portfolios are largely distinct, with 0 holdings in common adding up to 0% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
Largest positions held only by SCHD: MRK (4.92%), ABT (4.83%), AMGN (4.80%), KO (4.22%), VZ (3.97%). Only by XLB: LIN (12.94%), NEM (8.02%), FCX (6.48%), SHW (4.87%), ECL (4.80%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26.
Year-by-year returns
| Year | SCHD | XLB |
|---|---|---|
| 2022 | -3.3% | -12.3% |
| 2023 | +4.5% | +12.5% |
| 2024 | +11.7% | +0.1% |
| 2025 | +4.3% | +9.9% |
| 2026 | +29.1% | +18.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are SCHD and XLB good diversifiers for each other?
Only partially. A correlation of 0.75 means SCHD and XLB share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
FAQ
What is the correlation between SCHD and XLB?
Using weekly returns as of 2026-08-27: 0.75 over 3 years, with 0.55 over the last year and 0.80 over 5 years.
Is XLB a good diversifier for SCHD?
Only partially. A correlation of 0.75 means SCHD and XLB share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
How much do SCHD and XLB overlap?
0% by weight, across 0 common holdings, based on issuer-disclosed portfolios as of 2026-08-26.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/schd-vs-xlb.json
Embed this badge (it refreshes with the data), with attribution:
[](https://www.pairbook.io/pair/schd-vs-xlb/)
No key needed, free to use. Full endpoint list in the API documentation.
Related comparisons
Hubs: SCHD correlations · XLB correlations
