SM vs XLE: Correlation
SM Energy Company (SM) and Energy Select Sector SPDR Fund (XLE) show a very strong relationship: their 3-year correlation of weekly returns is 0.81.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are SM and XLE?
Across a 3-year window, the weekly returns of SM and XLE correlate at 0.81, very strong, meaning they move nearly in lockstep. Little has changed lately, as the 1-year reading of 0.79 lands near the 3-year figure. Stretching to 5 years gives 0.82, with an annualized covariance of 884.1 %².
Among the 21 assets we track against SM, XLE ranks #6 by 3-year correlation. Over the last 12 months XLE came out ahead by 7.9 percentage points (+36.1% against +44.0%). One caveat on sizing: SM is 2.1 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.
SM vs XLE: side by side
| SM (SM Energy Company) | XLE (Energy Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +36.1% | +44.0% |
| 5-year return | +114.6% | +206.7% |
| Volatility (ann.) | 47.6% | 23.1% |
| Beta vs S&P 500 | 0.44 | 0.27 |
| Max drawdown (3Y) | -64.9% | -20.1% |
| Market cap | $8.8B | – |
| P/E (trailing) | 6.3 | – |
| Dividend yield | 2.32% | 2.55% |
| Expense ratio | – | 0.08% |
| Assets under management | – | $39.2B |
| Sector / category | US Listed | Sector ETF |
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.
Year-by-year returns
| Year | SM | XLE |
|---|---|---|
| 2022 | +18.6% | +64.3% |
| 2023 | +13.1% | -0.6% |
| 2024 | +1.8% | +5.6% |
| 2025 | -49.7% | +7.9% |
| 2026 | +99.9% | +41.2% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are SM and XLE good diversifiers for each other?
No. With a correlation of 0.81, SM and XLE move nearly in lockstep, so holding both adds very little diversification.
FAQ
What is the correlation between SM and XLE?
The SM/XLE correlation stands at 0.81 on a 3-year window (1 year: 0.79, 5 years: 0.82), computed from weekly returns as of 2026-08-27.
Is XLE a good diversifier for SM?
No. With a correlation of 0.81, SM and XLE move nearly in lockstep, so holding both adds very little diversification.
What does a correlation of 0.81 mean?
Correlation ranges from −1 to +1. Values near +1 mean two assets move together, near 0 that they move independently, and negative values that they tend to move in opposite directions. It measures co-movement, not performance.
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Related comparisons
Hubs: SM correlations · XLE correlations
