SPY vs XLB: Correlation & Overlap
Measured on weekly returns over the past three years, SPDR S&P 500 ETF Trust (SPY) and Materials Select Sector SPDR Fund (XLB) carry a correlation of 0.62, a strong link. The two funds also share 1.9% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are SPY and XLB?
Over the past 3 years, SPY and XLB moved with a correlation of 0.62, which is strong. The past 12 months show a weaker link (0.33) than the 3-year average (0.62). Over 5 years the correlation is 0.74, and the annualized covariance of weekly returns is 150.1 %².
Within SPY's tracked universe of 4755 assets, XLB comes in at #158 by 3-year correlation. Twelve-month performance is nearly a tie, at +20.6% for SPY and +17.6% for XLB. Do not treat this figure as fixed: across three years the rolling one-year correlation ranged all the way from 0.35 to 0.87.
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.
SPY vs XLB: side by side
| SPY (SPDR S&P 500 ETF Trust) | XLB (Materials Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +20.6% | +17.6% |
| 5-year return | +82.4% | +36.9% |
| Volatility (ann.) | 14.5% | 16.7% |
| Beta vs S&P 500 | 1.00 | 0.72 |
| Max drawdown (3Y) | -18.8% | -23.2% |
| Dividend yield | 1.01% | 1.68% |
| Expense ratio | 0.09% | 0.08% |
| Assets under management | $795.3B | $8.3B |
| Sector / category | ETF · US Large Cap | Sector ETF |
SPY, State Street Investment Management's Large Blend fund, carries $795.3B under management, 504 holdings, a 0.09% expense ratio, a 1.01% 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 SPY and XLB
The two portfolios are largely distinct, with 25 holdings in common adding up to 1.9% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
| Common holding | Weight in SPY | Weight in XLB |
|---|---|---|
| LIN | 0.34% | 12.94% |
| NEM | 0.21% | 8.02% |
| FCX | 0.17% | 6.48% |
| SHW | 0.12% | 4.87% |
| ECL | 0.11% | 4.80% |
| APD | 0.10% | 4.71% |
| CRH | 0.10% | 4.12% |
| NUE | 0.09% | 4.28% |
| CTVA | 0.08% | 4.72% |
| VMC | 0.05% | 4.26% |
| STLD | 0.05% | 3.73% |
| MLM | 0.05% | 4.09% |
| SW | 0.04% | 3.39% |
| PPG | 0.04% | 3.32% |
| IFF | 0.03% | 2.90% |
Largest positions held only by SPY: NVDA (7.68%), AAPL (6.96%), MSFT (5.58%), AMZN (3.85%), GOOGL (3.03%). Only by XLB: IXDU6 (0.00%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26. Top 15 common positions shown.
Year-by-year returns
| Year | SPY | XLB |
|---|---|---|
| 2022 | -18.2% | -12.3% |
| 2023 | +26.2% | +12.5% |
| 2024 | +24.9% | +0.1% |
| 2025 | +17.7% | +9.9% |
| 2026 | +13.7% | +18.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are SPY and XLB 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 SPY and XLB?
Using weekly returns as of 2026-08-27: 0.62 over 3 years, with 0.33 over the last year and 0.74 over 5 years.
Is XLB a good diversifier for SPY?
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.
How much do SPY and XLB overlap?
Per the issuers' own portfolio disclosures (2026-08-26), the overlap is 1.9% by weight over 25 common positions.
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Related comparisons
Hubs: SPY correlations · XLB correlations
