VNQ vs XLK: Correlation & Overlap
Measured on weekly returns over the past three years, Vanguard Real Estate ETF (VNQ) and Technology Select Sector SPDR Fund (XLK) carry a correlation of 0.29, a weak link. The two funds also share 0% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are VNQ and XLK?
Over the past 3 years, VNQ and XLK moved with a correlation of 0.29, which is weak. Lately the two have drifted apart, with the 1-year correlation at 0.06 versus 0.29 over 3 years. Over 5 years the correlation is 0.50, and the annualized covariance of weekly returns is 114.2 %².
Among the 149 assets we track against VNQ, XLK ranks #137 by 3-year correlation. Their recent paths diverged sharply: over the last 12 months XLK outperformed by 33.1 percentage points (+10.3% for VNQ against +43.4% for XLK). This link changes with the market regime, having swung between 0.04 and 0.71 on a rolling one-year basis.
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.
VNQ vs XLK: side by side
| VNQ (Vanguard Real Estate ETF) | XLK (Technology Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +10.3% | +43.4% |
| 5-year return | +9.5% | +145.2% |
| Volatility (ann.) | 16.6% | 24.0% |
| Beta vs S&P 500 | 0.59 | 1.50 |
| Max drawdown (3Y) | -17.5% | -25.7% |
| Dividend yield | 3.51% | 0.45% |
| Expense ratio | 0.13% | 0.08% |
| Assets under management | $73.1B | $115.4B |
| Sector / category | ETF · Real Estate | Sector ETF |
VNQ is a Real Estate fund from Vanguard: $73.1B under management, 140 holdings, a 0.13% expense ratio, a 3.51% trailing dividend yield. 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.
Portfolio overlap between VNQ and XLK
The two portfolios are largely distinct: 0% of the funds' weight sits in the same underlying holdings (0 common positions). Correlation tells you they move together; overlap tells you why.
Largest positions held only by VNQ: VRTPX (14.54%), WELL (8.54%), PLD (7.04%), EQIX (5.25%), AMT (4.22%). Only by XLK: NVDA (13.91%), AAPL (12.61%), MSFT (10.10%), AVGO (4.61%), AMD (4.09%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-07-31.
Year-by-year returns
| Year | VNQ | XLK |
|---|---|---|
| 2022 | -26.3% | -27.7% |
| 2023 | +11.9% | +56.0% |
| 2024 | +4.8% | +21.6% |
| 2025 | +3.2% | +24.6% |
| 2026 | +12.5% | +31.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VNQ and XLK good diversifiers for each other?
Yes, to a useful degree: a correlation of 0.29 leaves real independence between the two, which historically damped combined volatility.
FAQ
What is the correlation between VNQ and XLK?
Using weekly returns as of 2026-08-27: 0.29 over 3 years, with 0.06 over the last year and 0.50 over 5 years.
Is XLK a good diversifier for VNQ?
Yes, to a useful degree: a correlation of 0.29 leaves real independence between the two, which historically damped combined volatility.
How much do VNQ and XLK overlap?
0% by weight, across 0 common holdings, based on issuer-disclosed portfolios as of 2026-07-31.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/vnq-vs-xlk.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/vnq-vs-xlk/)
The core API is free. Terms and every endpoint in the API documentation.
Related comparisons
Hubs: VNQ correlations · XLK correlations
