SPY vs XLY: Correlation & Overlap
SPDR S&P 500 ETF Trust (SPY) and Consumer Discretionary Select Sector SPDR Fund (XLY) show a very strong relationship: their 3-year correlation of weekly returns is 0.85. The two funds also share 9.1% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are SPY and XLY?
Across a 3-year window, the weekly returns of SPY and XLY correlate at 0.85, very strong, meaning they move nearly in lockstep. Recent behaviour matches the longer record: 0.80 over 1 year against 0.85 over 3. Stretching to 5 years gives 0.87, with an annualized covariance of 240.3 %².
Among the 4755 assets we track against SPY, XLY ranks #36 by 3-year correlation. The last year tells two different stories: SPY led by 20.7 percentage points, +20.6% for SPY against -0.1% for XLY. The link looks structural: the rolling one-year correlation barely moved, holding between 0.81 and 0.90.
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 XLY: side by side
| SPY (SPDR S&P 500 ETF Trust) | XLY (Consumer Discretionary Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +20.6% | -0.1% |
| 5-year return | +82.4% | +31.8% |
| Volatility (ann.) | 14.5% | 19.7% |
| Beta vs S&P 500 | 1.00 | 1.15 |
| Max drawdown (3Y) | -18.8% | -26.0% |
| Dividend yield | 1.01% | 0.78% |
| Expense ratio | 0.09% | 0.08% |
| Assets under management | $795.3B | $22.5B |
| Sector / category | ETF · US Large Cap | Sector ETF |
SPY is a Large Blend fund from State Street Investment Management: $795.3B under management, 504 holdings, a 0.09% expense ratio, a 1.01% trailing dividend yield. XLY is a Consumer Cyclical fund from State Street Investment Management: $22.5B under management, 47 holdings, a 0.08% expense ratio, a 0.78% trailing dividend yield.
Portfolio overlap between SPY and XLY
The two portfolios are largely distinct: 9.1% of the funds' weight sits in the same underlying holdings (47 common positions). Correlation tells you they move together; overlap tells you why.
| Common holding | Weight in SPY | Weight in XLY |
|---|---|---|
| AMZN | 3.85% | 24.32% |
| TSLA | 1.47% | 16.18% |
| HD | 0.50% | 5.54% |
| MCD | 0.29% | 4.11% |
| BKNG | 0.24% | 4.04% |
| TJX | 0.23% | 3.55% |
| SBUX | 0.19% | 3.08% |
| LOW | 0.18% | 2.94% |
| DASH | 0.14% | 2.24% |
| ABNB | 0.12% | 1.96% |
| MAR | 0.12% | 1.96% |
| GM | 0.12% | 1.94% |
| ROST | 0.12% | 1.90% |
| HLT | 0.11% | 1.89% |
| ORLY | 0.11% | 1.85% |
Largest positions held only by SPY: NVDA (7.68%), AAPL (6.96%), MSFT (5.58%), GOOGL (3.03%), AVGO (2.55%). Only by XLY: .
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 | XLY |
|---|---|---|
| 2022 | -18.2% | -36.3% |
| 2023 | +26.2% | +39.6% |
| 2024 | +24.9% | +26.5% |
| 2025 | +17.7% | +7.4% |
| 2026 | +13.7% | -2.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are SPY and XLY good diversifiers for each other?
No: a correlation of 0.85 means SPY and XLY tend to fall together, which is precisely when diversification is supposed to help.
FAQ
What is the correlation between SPY and XLY?
As of 2026-08-27, the correlation of weekly returns between SPY and XLY is 0.85 over 3 years, 0.80 over 1 year and 0.87 over 5 years.
Is XLY a good diversifier for SPY?
No: a correlation of 0.85 means SPY and XLY tend to fall together, which is precisely when diversification is supposed to help.
How much do SPY and XLY overlap?
9.1% by weight, across 47 common holdings, based on issuer-disclosed portfolios as of 2026-08-26.
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