VIG vs XLE: Correlation & Overlap
Vanguard Dividend Appreciation ETF (VIG) and Energy Select Sector SPDR Fund (XLE) show a weak relationship: their 3-year correlation of weekly returns is 0.27. Looking through to holdings, 3.3% of the two portfolios is the same by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are VIG and XLE?
On 3 years of weekly data the VIG/XLE correlation comes out at 0.27, weak. The link has loosened recently: the 1-year correlation (-0.19) runs below the 3-year figure (0.27). The 5-year figure is 0.32, and annualized covariance runs at 75.3 %².
Within VIG's tracked universe of 106 assets, XLE comes in at #96 by 3-year correlation. The last year tells two different stories: XLE led by 26.9 percentage points, +17.1% for VIG against +44.0% for XLE. The relationship is regime-dependent: the rolling one-year correlation swung between -0.19 and 0.58 over the past three years, so this pair behaves very differently depending on the market environment. Note the risk asymmetry: XLE runs 1.9 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.
VIG vs XLE: side by side
| VIG (Vanguard Dividend Appreciation ETF) | XLE (Energy Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +17.1% | +44.0% |
| 5-year return | +64.0% | +206.7% |
| Volatility (ann.) | 11.9% | 23.1% |
| Beta vs S&P 500 | 0.74 | 0.27 |
| Max drawdown (3Y) | -15.0% | -20.1% |
| Dividend yield | 1.50% | 2.55% |
| Expense ratio | 0.04% | 0.08% |
| Assets under management | $130.9B | $39.2B |
| Sector / category | ETF · Dividend | Sector ETF |
On the fund side, VIG sits in the Large Blend category at Vanguard, with $130.9B under management, 333 holdings, a 0.04% expense ratio, a 1.50% 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.
Portfolio overlap between VIG and XLE
The two portfolios are largely distinct: 3.3% of the funds' weight sits in the same underlying holdings (3 common positions). Correlation tells you they move together; overlap tells you why.
Largest positions held only by VIG: AVGO (4.65%), AAPL (4.47%), MSFT (4.35%), JPM (4.09%), LLY (3.94%). Only by XLE: CVX (14.84%), COP (6.30%), MPC (5.40%), VLO (5.05%), SLB (4.46%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-07-31. Top 3 common positions shown.
Year-by-year returns
| Year | VIG | XLE |
|---|---|---|
| 2022 | -9.8% | +64.3% |
| 2023 | +14.5% | -0.6% |
| 2024 | +17.0% | +5.6% |
| 2025 | +14.2% | +7.9% |
| 2026 | +11.6% | +41.2% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VIG and XLE good diversifiers for each other?
A fair diversifier. At 0.27, enough of each asset's movement is its own that the pair has smoothed outcomes historically.
FAQ
What is the correlation between VIG and XLE?
The VIG/XLE correlation stands at 0.27 on a 3-year window (1 year: -0.19, 5 years: 0.32), computed from weekly returns as of 2026-08-27.
Is XLE a good diversifier for VIG?
A fair diversifier. At 0.27, enough of each asset's movement is its own that the pair has smoothed outcomes historically.
How much do VIG and XLE overlap?
Per the issuers' own portfolio disclosures (2026-07-31), the overlap is 3.3% by weight over 3 common positions.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/vig-vs-xle.json
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Related comparisons
Hubs: VIG correlations · XLE correlations
