TSM vs XLK: Correlation
Taiwan Semiconductor Manufacturing Company Ltd. (TSM) and Technology Select Sector SPDR Fund (XLK) show a strong relationship: their 3-year correlation of weekly returns is 0.73.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are TSM and XLK?
Across a 3-year window, the weekly returns of TSM and XLK correlate at 0.73, strong. The link has loosened recently: the 1-year correlation (0.57) runs below the 3-year figure (0.73). Stretching to 5 years gives 0.67, with an annualized covariance of 608.5 %².
XLK is one of the assets that tracks TSM most closely: it ranks #3 out of the 16 assets we track against TSM. Correlation aside, the last 12 months split them widely, with TSM ahead by 37.1 points (+80.5% versus +43.4%).
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.
TSM vs XLK: side by side
| TSM (Taiwan Semiconductor Manufacturing Company Ltd.) | XLK (Technology Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +80.5% | +43.4% |
| 5-year return | +289.6% | +145.2% |
| Volatility (ann.) | 34.9% | 24.0% |
| Beta vs S&P 500 | 1.59 | 1.50 |
| Max drawdown (3Y) | -36.8% | -25.7% |
| Market cap | $2,216.2B | – |
| P/E (trailing) | 31.1 | – |
| Dividend yield | 6.22% | 0.45% |
| Expense ratio | – | 0.08% |
| Assets under management | – | $115.4B |
| Sector / category | US Listed | Sector ETF |
On the fund side, XLK sits in the Technology category at State Street Investment Management, with $115.4B under management, 73 holdings, a 0.08% expense ratio, a 0.45% trailing dividend yield.
Year-by-year returns
| Year | TSM | XLK |
|---|---|---|
| 2022 | -36.7% | -27.7% |
| 2023 | +42.3% | +56.0% |
| 2024 | +92.6% | +21.6% |
| 2025 | +55.9% | +24.6% |
| 2026 | +41.3% | +31.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are TSM and XLK good diversifiers for each other?
Somewhat, no more. With 0.73 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between TSM and XLK?
As of 2026-08-27, the correlation of weekly returns between TSM and XLK is 0.73 over 3 years, 0.57 over 1 year and 0.67 over 5 years.
Is XLK a good diversifier for TSM?
Somewhat, no more. With 0.73 correlation, most large moves hit both names, and the diversification benefit stays modest.
What does a correlation of 0.73 mean?
A reading of 0.73 sits on a scale from −1 (opposite moves) through 0 (unrelated) to +1 (identical moves). Correlation captures direction, not magnitude or performance.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/tsm-vs-xlk.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/tsm-vs-xlk/)
The core API is free. Terms and every endpoint in the API documentation.
Related comparisons
Hubs: TSM correlations · XLK correlations
