TLT vs XLE: Correlation
iShares 20+ Year Treasury Bond ETF (TLT) and Energy Select Sector SPDR Fund (XLE) show a negative relationship: their 3-year correlation of weekly returns is -0.19.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are TLT and XLE?
On 3 years of weekly data the TLT/XLE correlation comes out at -0.19, negative, meaning they tend to move in opposite directions. Lately the two have drifted apart, with the 1-year correlation at -0.47 versus -0.19 over 3 years. The 5-year figure is -0.21, and annualized covariance runs at -59.0 %².
Among the 37 assets we track against TLT, XLE ranks #22 by 3-year correlation. The last year tells two different stories: XLE led by 43.7 percentage points, +0.3% for TLT against +44.0% for XLE. This link changes with the market regime, having swung between -0.44 and 0.09 on a rolling one-year basis. One caveat on sizing: XLE is 1.7 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.
TLT vs XLE: side by side
| TLT (iShares 20+ Year Treasury Bond ETF) | XLE (Energy Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +0.3% | +44.0% |
| 5-year return | -34.0% | +206.7% |
| Volatility (ann.) | 13.5% | 23.1% |
| Beta vs S&P 500 | 0.11 | 0.27 |
| Max drawdown (3Y) | -14.8% | -20.1% |
| Dividend yield | 4.75% | 2.55% |
| Expense ratio | 0.15% | 0.08% |
| Assets under management | $41.5B | $39.2B |
| Sector / category | ETF · Bonds | Sector ETF |
TLT is a Long Government fund from iShares: $41.5B under management, a 0.15% expense ratio, a 4.75% 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.
Year-by-year returns
| Year | TLT | XLE |
|---|---|---|
| 2022 | -31.2% | +64.3% |
| 2023 | +2.8% | -0.6% |
| 2024 | -8.1% | +5.6% |
| 2025 | +4.2% | +7.9% |
| 2026 | -2.1% | +41.2% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are TLT and XLE good diversifiers for each other?
Yes: at -0.19, the two have gone their own ways historically, which is what genuine diversification looks like.
FAQ
What is the correlation between TLT and XLE?
The TLT/XLE correlation stands at -0.19 on a 3-year window (1 year: -0.47, 5 years: -0.21), computed from weekly returns as of 2026-08-27.
Is XLE a good diversifier for TLT?
Yes: at -0.19, the two have gone their own ways historically, which is what genuine diversification looks like.
What does a correlation of -0.19 mean?
On the −1 to +1 scale, -0.19 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.
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Related comparisons
Hubs: TLT correlations · XLE correlations
