STLD vs XLB: Correlation
Steel Dynamics (STLD) and Materials Select Sector SPDR Fund (XLB) show a moderate relationship: their 3-year correlation of weekly returns is 0.59.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are STLD and XLB?
On 3 years of weekly data the STLD/XLB correlation comes out at 0.59, moderate. The link has loosened recently: the 1-year correlation (0.34) runs below the 3-year figure (0.59). The 5-year figure is 0.64, and annualized covariance runs at 339.2 %².
By 3-year correlation, XLB places #12 of the 33 assets tracked against STLD. Their recent paths diverged sharply: over the last 12 months STLD outperformed by 62.2 percentage points (+79.8% for STLD against +17.6% for XLB). Across three years, the rolling one-year figure varied moderately, from 0.40 to 0.77. One caveat on sizing: STLD 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.
STLD vs XLB: side by side
| STLD (Steel Dynamics) | XLB (Materials Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +79.8% | +17.6% |
| 5-year return | +262.0% | +36.9% |
| Volatility (ann.) | 34.5% | 16.7% |
| Beta vs S&P 500 | 1.13 | 0.72 |
| Max drawdown (3Y) | -28.7% | -23.2% |
| Market cap | $33.8B | – |
| P/E (trailing) | 21.4 | – |
| Dividend yield | 0.87% | 1.68% |
| Expense ratio | – | 0.08% |
| Assets under management | – | $8.3B |
| Sector / category | Materials | Sector ETF |
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.
Year-by-year returns
| Year | STLD | XLB |
|---|---|---|
| 2022 | +60.1% | -12.3% |
| 2023 | +22.8% | +12.5% |
| 2024 | -2.0% | +0.1% |
| 2025 | +50.7% | +9.9% |
| 2026 | +39.9% | +18.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Fund exposure
Keep in mind that XLB holds STLD at a 3.73% weight, which makes a slice of this correlation mechanical rather than coincidental.
Are STLD and XLB good diversifiers for each other?
Only partially. A correlation of 0.59 means STLD and XLB share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
FAQ
What is the correlation between STLD and XLB?
Using weekly returns as of 2026-08-27: 0.59 over 3 years, with 0.34 over the last year and 0.64 over 5 years.
Is XLB a good diversifier for STLD?
Only partially. A correlation of 0.59 means STLD and XLB share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
What does a correlation of 0.59 mean?
On the −1 to +1 scale, 0.59 describes how much the two returns move together: +1 is lockstep, 0 is independence, negative values mean opposite directions. It says nothing about which performed better.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/stld-vs-xlb.json
Embed this badge (it refreshes with the data), with attribution:
[](https://www.pairbook.io/pair/stld-vs-xlb/)
No key needed, free to use. Full endpoint list in the API documentation.
Related comparisons
Hubs: STLD correlations · XLB correlations
