SCHW vs XLF: Correlation
Charles Schwab Corporation (SCHW) and Financial Select Sector SPDR Fund (XLF) show a strong relationship: their 3-year correlation of weekly returns is 0.62.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are SCHW and XLF?
Over the past 3 years, SCHW and XLF moved with a correlation of 0.62, which is strong. The relationship has been stable: the 1-year correlation (0.56) sits close to the 3-year figure. Over 5 years the correlation is 0.69, and the annualized covariance of weekly returns is 279.8 %².
By 3-year correlation, XLF places #6 of the 27 assets tracked against SCHW. Twelve-month performance is nearly a tie, at +13.0% for SCHW and +9.3% for XLF. On a rolling one-year basis the correlation drifted between 0.48 and 0.79, a moderate band. Risk is not evenly split, since SCHW carries 1.7 times the volatility of the other side.
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.
SCHW vs XLF: side by side
| SCHW (Charles Schwab Corporation) | XLF (Financial Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +13.0% | +9.3% |
| 5-year return | +57.3% | +64.2% |
| Volatility (ann.) | 27.8% | 16.2% |
| Beta vs S&P 500 | 0.93 | 0.84 |
| Max drawdown (3Y) | -21.4% | -15.5% |
| Market cap | $186.9B | – |
| P/E (trailing) | 19.9 | – |
| Dividend yield | 1.08% | 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 | SCHW | XLF |
|---|---|---|
| 2022 | +0.1% | -10.6% |
| 2023 | -16.0% | +12.0% |
| 2024 | +9.2% | +30.6% |
| 2025 | +36.6% | +14.9% |
| 2026 | +9.2% | +6.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Fund exposure
Keep in mind that XLF holds SCHW at a 2.17% weight, which makes a slice of this correlation mechanical rather than coincidental.
Are SCHW and XLF good diversifiers for each other?
To a limited degree. At 0.62 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 SCHW and XLF?
As of 2026-08-27, the correlation of weekly returns between SCHW and XLF is 0.62 over 3 years, 0.56 over 1 year and 0.69 over 5 years.
Is XLF a good diversifier for SCHW?
To a limited degree. At 0.62 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
What does a correlation of 0.62 mean?
A reading of 0.62 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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Hubs: SCHW correlations · XLF correlations
