SCHD vs XLE: Correlation & Overlap
Measured on weekly returns over the past three years, Schwab US Dividend Equity ETF (SCHD) and Energy Select Sector SPDR Fund (XLE) carry a correlation of 0.59, a moderate link. By holdings, the two funds overlap 14.7% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are SCHD and XLE?
On 3 years of weekly data the SCHD/XLE correlation comes out at 0.59, moderate. The past 12 months show a weaker link (0.45) than the 3-year average (0.59). The 5-year figure is 0.54, and annualized covariance runs at 174.9 %².
By 3-year correlation, XLE places #43 of the 108 assets tracked against SCHD. The trailing year gives XLE the advantage: +29.6% versus +44.0%, a 14.4-point spread. Across three years, the rolling one-year figure varied moderately, from 0.40 to 0.74. One caveat on sizing: XLE is 1.8 times as volatile as the other leg, so an equal-dollar split is far from equal-risk.
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 XLE: side by side
| SCHD (Schwab US Dividend Equity ETF) | XLE (Energy Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +29.6% | +44.0% |
| 5-year return | +60.9% | +206.7% |
| Volatility (ann.) | 12.9% | 23.1% |
| Beta vs S&P 500 | 0.52 | 0.27 |
| Max drawdown (3Y) | -16.1% | -20.1% |
| Dividend yield | 3.13% | 2.55% |
| Expense ratio | 0.06% | 0.08% |
| Assets under management | $104.2B | $39.2B |
| Sector / category | ETF · Dividend | Sector ETF |
On the fund side, SCHD sits in the Large Value category at Schwab ETFs, with $104.2B under management, 101 holdings, a 0.06% expense ratio, a 3.13% trailing dividend yield. XLE is an Equity Energy fund from State Street Investment Management: $39.2B under management, 22 holdings, a 0.08% expense ratio, a 2.55% trailing dividend yield.
Portfolio overlap between SCHD and XLE
The two portfolios are largely distinct: 14.7% of the funds' weight sits in the same underlying holdings (7 common positions). Correlation tells you they move together; overlap tells you why.
| Common holding | Weight in SCHD | Weight in XLE |
|---|---|---|
| CVX | 3.89% | 14.84% |
| COP | 3.86% | 6.30% |
| SLB | 1.95% | 4.46% |
| EOG | 1.87% | 4.24% |
| OKE | 1.45% | 3.55% |
| DVN | 1.31% | 3.20% |
| APA | 0.35% | 0.86% |
Largest positions held only by SCHD: MRK (4.92%), ABT (4.83%), AMGN (4.80%), KO (4.22%), VZ (3.97%). Only by XLE: XOM (20.03%), MPC (5.40%), PSX (5.37%), VLO (5.05%), WMB (3.84%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26. Top 7 common positions shown.
Year-by-year returns
| Year | SCHD | XLE |
|---|---|---|
| 2022 | -3.3% | +64.3% |
| 2023 | +4.5% | -0.6% |
| 2024 | +11.7% | +5.6% |
| 2025 | +4.3% | +7.9% |
| 2026 | +29.1% | +41.2% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are SCHD and XLE good diversifiers for each other?
Only partially. A correlation of 0.59 means SCHD and XLE 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 XLE?
As of 2026-08-27, the correlation of weekly returns between SCHD and XLE is 0.59 over 3 years, 0.45 over 1 year and 0.54 over 5 years.
Is XLE a good diversifier for SCHD?
Only partially. A correlation of 0.59 means SCHD and XLE share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
How much do SCHD and XLE overlap?
The two funds share 7 holdings amounting to 14.7% of weight, per issuer portfolio files dated 2026-08-26.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/schd-vs-xle.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/schd-vs-xle/)
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