SPY vs XLE: Correlation & Overlap
Measured on weekly returns over the past three years, SPDR S&P 500 ETF Trust (SPY) and Energy Select Sector SPDR Fund (XLE) carry a correlation of 0.17, a weak link. Looking through to holdings, 3.4% of the two portfolios is the same by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are SPY and XLE?
On 3 years of weekly data the SPY/XLE correlation comes out at 0.17, weak. The past 12 months show a weaker link (-0.41) than the 3-year average (0.17). The 5-year figure is 0.28, and annualized covariance runs at 57.3 %².
By 3-year correlation, XLE places #3577 of the 4755 assets tracked against SPY. The last year tells two different stories: XLE led by 23.4 percentage points, +20.6% for SPY against +44.0% for XLE. This link changes with the market regime, having swung between -0.42 and 0.56 on a rolling one-year basis. One caveat on sizing: XLE is 1.6 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.
SPY vs XLE: side by side
| SPY (SPDR S&P 500 ETF Trust) | XLE (Energy Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +20.6% | +44.0% |
| 5-year return | +82.4% | +206.7% |
| Volatility (ann.) | 14.5% | 23.1% |
| Beta vs S&P 500 | 1.00 | 0.27 |
| Max drawdown (3Y) | -18.8% | -20.1% |
| Dividend yield | 1.01% | 2.55% |
| Expense ratio | 0.09% | 0.08% |
| Assets under management | $795.3B | $39.2B |
| Sector / category | ETF · US Large Cap | Sector ETF |
On the fund side, SPY sits in the Large Blend category at State Street Investment Management, with $795.3B under management, 504 holdings, a 0.09% expense ratio, a 1.01% 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 SPY and XLE
The two portfolios are largely distinct, with 21 holdings in common adding up to 3.4% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
| Common holding | Weight in SPY | Weight in XLE |
|---|---|---|
| XOM | 0.99% | 20.03% |
| CVX | 0.57% | 14.84% |
| COP | 0.24% | 6.30% |
| MPC | 0.16% | 5.40% |
| VLO | 0.16% | 5.05% |
| PSX | 0.15% | 5.37% |
| WMB | 0.14% | 3.84% |
| SLB | 0.12% | 4.46% |
| EOG | 0.12% | 4.24% |
| TRGP | 0.10% | 3.74% |
| KMI | 0.09% | 3.72% |
| BKR | 0.09% | 3.65% |
| OKE | 0.09% | 3.55% |
| DVN | 0.08% | 3.20% |
| OXY | 0.06% | 2.52% |
Largest positions held only by SPY: NVDA (7.68%), AAPL (6.96%), MSFT (5.58%), AMZN (3.85%), GOOGL (3.03%). Only by XLE: IXPU6 (0.01%).
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 | XLE |
|---|---|---|
| 2022 | -18.2% | +64.3% |
| 2023 | +26.2% | -0.6% |
| 2024 | +24.9% | +5.6% |
| 2025 | +17.7% | +7.9% |
| 2026 | +13.7% | +41.2% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are SPY and XLE good diversifiers for each other?
Yes. With a correlation of 0.17, SPY and XLE have moved largely independently, which makes them a genuinely diversifying pair by historical standards.
FAQ
What is the correlation between SPY and XLE?
The SPY/XLE correlation stands at 0.17 on a 3-year window (1 year: -0.41, 5 years: 0.28), computed from weekly returns as of 2026-08-27.
Is XLE a good diversifier for SPY?
Yes. With a correlation of 0.17, SPY and XLE have moved largely independently, which makes them a genuinely diversifying pair by historical standards.
How much do SPY and XLE overlap?
3.4% by weight, across 21 common holdings, based on issuer-disclosed portfolios as of 2026-08-26.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/spy-vs-xle.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/spy-vs-xle/)
Free with attribution; caching and terms are described in the API documentation.
Related comparisons
Hubs: SPY correlations · XLE correlations
