USO vs XLY: Correlation
Measured on weekly returns over the past three years, United States Oil Fund (USO) and Consumer Discretionary Select Sector SPDR Fund (XLY) carry a correlation of -0.17, a negative link.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are USO and XLY?
On 3 years of weekly data the USO/XLY correlation comes out at -0.17, negative, meaning they tend to move in opposite directions. The past 12 months show a weaker link (-0.36) than the 3-year average (-0.17). The 5-year figure is -0.05, and annualized covariance runs at -134.9 %².
Within USO's tracked universe of 165 assets, XLY comes in at #41 by 3-year correlation. Correlation aside, the last 12 months split them widely, with USO ahead by 74.2 points (+74.1% versus -0.1%). This link changes with the market regime, having swung between -0.36 and 0.25 on a rolling one-year basis. Note the risk asymmetry: USO runs 2.0 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 XLY: side by side
| USO (United States Oil Fund) | XLY (Consumer Discretionary Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +74.1% | -0.1% |
| 5-year return | +168.6% | +31.8% |
| Volatility (ann.) | 39.4% | 19.7% |
| Beta vs S&P 500 | -0.20 | 1.15 |
| Max drawdown (3Y) | -32.5% | -26.0% |
| Dividend yield | – | 0.78% |
| Expense ratio | – | 0.08% |
| Assets under management | – | $22.5B |
| Sector / category | ETF · Commodities | Sector ETF |
XLY is a Consumer Cyclical fund from State Street Investment Management: $22.5B under management, 47 holdings, a 0.08% expense ratio, a 0.78% trailing dividend yield.
Year-by-year returns
| Year | USO | XLY |
|---|---|---|
| 2022 | +29.0% | -36.3% |
| 2023 | -4.9% | +39.6% |
| 2024 | +13.4% | +26.5% |
| 2025 | -8.5% | +7.4% |
| 2026 | +88.0% | -2.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are USO and XLY good diversifiers for each other?
Yes. With a correlation of -0.17, USO and XLY have moved largely independently, which makes them a genuinely diversifying pair by historical standards.
FAQ
What is the correlation between USO and XLY?
The USO/XLY correlation stands at -0.17 on a 3-year window (1 year: -0.36, 5 years: -0.05), computed from weekly returns as of 2026-08-27.
Is XLY a good diversifier for USO?
Yes. With a correlation of -0.17, USO and XLY have moved largely independently, which makes them a genuinely diversifying pair by historical standards.
What does a correlation of -0.17 mean?
A reading of -0.17 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-xly.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/uso-vs-xly/)
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Related comparisons
Hubs: USO correlations · XLY correlations
