USO vs XLB: Correlation
Measured on weekly returns over the past three years, United States Oil Fund (USO) and Materials Select Sector SPDR Fund (XLB) carry a correlation of -0.16, a negative link.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are USO and XLB?
On 3 years of weekly data the USO/XLB correlation comes out at -0.16, negative, meaning they tend to move in opposite directions. The past 12 months show a weaker link (-0.38) than the 3-year average (-0.16). The 5-year figure is 0.07, and annualized covariance runs at -103.7 %².
By 3-year correlation, XLB places #35 of the 165 assets tracked against USO. Their recent paths diverged sharply: over the last 12 months USO outperformed by 56.5 percentage points (+74.1% for USO against +17.6% for XLB). This link changes with the market regime, having swung between -0.41 and 0.37 on a rolling one-year basis. One caveat on sizing: USO is 2.4 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.
USO vs XLB: side by side
| USO (United States Oil Fund) | XLB (Materials Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +74.1% | +17.6% |
| 5-year return | +168.6% | +36.9% |
| Volatility (ann.) | 39.4% | 16.7% |
| Beta vs S&P 500 | -0.20 | 0.72 |
| Max drawdown (3Y) | -32.5% | -23.2% |
| Dividend yield | – | 1.68% |
| Expense ratio | – | 0.08% |
| Assets under management | – | $8.3B |
| Sector / category | ETF · Commodities | 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 | USO | XLB |
|---|---|---|
| 2022 | +29.0% | -12.3% |
| 2023 | -4.9% | +12.5% |
| 2024 | +13.4% | +0.1% |
| 2025 | -8.5% | +9.9% |
| 2026 | +88.0% | +18.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are USO and XLB good diversifiers for each other?
Yes. With a correlation of -0.16, USO and XLB have moved largely independently, which makes them a genuinely diversifying pair by historical standards.
FAQ
What is the correlation between USO and XLB?
The USO/XLB correlation stands at -0.16 on a 3-year window (1 year: -0.38, 5 years: 0.07), computed from weekly returns as of 2026-08-27.
Is XLB a good diversifier for USO?
Yes. With a correlation of -0.16, USO and XLB have moved largely independently, which makes them a genuinely diversifying pair by historical standards.
What does a correlation of -0.16 mean?
A reading of -0.16 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/uso-vs-xlb.json
Embed this badge (it refreshes with the data), with attribution:
[](https://www.pairbook.io/pair/uso-vs-xlb/)
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Related comparisons
Hubs: USO correlations · XLB correlations
