USO vs XLE: Correlation
Measured on weekly returns over the past three years, United States Oil Fund (USO) and Energy Select Sector SPDR Fund (XLE) carry a correlation of 0.58, a moderate link.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are USO and XLE?
On 3 years of weekly data the USO/XLE correlation comes out at 0.58, moderate. Little has changed lately, as the 1-year reading of 0.54 lands near the 3-year figure. The 5-year figure is 0.65, and annualized covariance runs at 522.3 %².
Among the 165 assets we track against USO, XLE ranks #16 by 3-year correlation. Correlation aside, the last 12 months split them widely, with USO ahead by 30.1 points (+74.1% versus +44.0%). Across three years, the rolling one-year figure varied moderately, from 0.38 to 0.82. Note the risk asymmetry: USO runs 1.7 times the annualized volatility of the other leg, so equal-weighting the two is not an equal-risk position.
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 XLE: side by side
| USO (United States Oil Fund) | XLE (Energy Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +74.1% | +44.0% |
| 5-year return | +168.6% | +206.7% |
| Volatility (ann.) | 39.4% | 23.1% |
| Beta vs S&P 500 | -0.20 | 0.27 |
| Max drawdown (3Y) | -32.5% | -20.1% |
| Dividend yield | – | 2.55% |
| Expense ratio | – | 0.08% |
| Assets under management | – | $39.2B |
| Sector / category | ETF · Commodities | Sector ETF |
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 | USO | XLE |
|---|---|---|
| 2022 | +29.0% | +64.3% |
| 2023 | -4.9% | -0.6% |
| 2024 | +13.4% | +5.6% |
| 2025 | -8.5% | +7.9% |
| 2026 | +88.0% | +41.2% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are USO and XLE good diversifiers for each other?
Only partially. A correlation of 0.58 means USO and XLE 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 USO and XLE?
Using weekly returns as of 2026-08-27: 0.58 over 3 years, with 0.54 over the last year and 0.65 over 5 years.
Is XLE a good diversifier for USO?
Only partially. A correlation of 0.58 means USO and XLE share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
What does a correlation of 0.58 mean?
Correlation ranges from −1 to +1. Values near +1 mean two assets move together, near 0 that they move independently, and negative values that they tend to move in opposite directions. It measures co-movement, not performance.
Use this data
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Related comparisons
Hubs: USO correlations · XLE correlations
