VNQ vs XLV: Correlation & Overlap
Vanguard Real Estate ETF (VNQ) and Health Care Select Sector SPDR Fund (XLV) show a moderate relationship: their 3-year correlation of weekly returns is 0.55. By holdings, the two funds overlap 0% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are VNQ and XLV?
On 3 years of weekly data the VNQ/XLV correlation comes out at 0.55, moderate. Recent behaviour matches the longer record: 0.50 over 1 year against 0.55 over 3. The 5-year figure is 0.62, and annualized covariance runs at 132.8 %².
Within VNQ's tracked universe of 149 assets, XLV comes in at #106 by 3-year correlation. The last year tells two different stories: XLV led by 17.2 percentage points, +10.3% for VNQ against +27.5% for XLV. Stability stands out here, with the rolling one-year correlation confined to 0.49 through 0.63.
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 XLV: side by side
| VNQ (Vanguard Real Estate ETF) | XLV (Health Care Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +10.3% | +27.5% |
| 5-year return | +9.5% | +37.4% |
| Volatility (ann.) | 16.6% | 14.7% |
| Beta vs S&P 500 | 0.59 | 0.42 |
| Max drawdown (3Y) | -17.5% | -17.1% |
| Dividend yield | 3.51% | 1.56% |
| Expense ratio | 0.13% | 0.08% |
| Assets under management | $73.1B | $41.7B |
| Sector / category | ETF · Real Estate | Sector ETF |
On the fund side, VNQ sits in the Real Estate category at Vanguard, with $73.1B under management, 140 holdings, a 0.13% expense ratio, a 3.51% trailing dividend yield. On the fund side, XLV sits in the Health category at State Street Investment Management, with $41.7B under management, 61 holdings, a 0.08% expense ratio, a 1.56% trailing dividend yield.
Portfolio overlap between VNQ and XLV
The two portfolios are largely distinct. Weighing the shared positions, 0% of the two funds is identical, spread across 0 common holdings. That shared book is a large part of why the returns line up.
Largest positions held only by VNQ: VRTPX (14.54%), WELL (8.54%), PLD (7.04%), EQIX (5.25%), AMT (4.22%). Only by XLV: LLY (15.03%), JNJ (10.38%), ABBV (7.42%), MRK (6.04%), UNH (5.82%).
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 | XLV |
|---|---|---|
| 2022 | -26.3% | -2.1% |
| 2023 | +11.9% | +2.1% |
| 2024 | +4.8% | +2.5% |
| 2025 | +3.2% | +14.5% |
| 2026 | +12.5% | +11.8% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VNQ and XLV good diversifiers for each other?
To a limited degree. At 0.55 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
FAQ
What is the correlation between VNQ and XLV?
As of 2026-08-27, the correlation of weekly returns between VNQ and XLV is 0.55 over 3 years, 0.50 over 1 year and 0.62 over 5 years.
Is XLV a good diversifier for VNQ?
To a limited degree. At 0.55 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
How much do VNQ and XLV 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-xlv.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/vnq-vs-xlv/)
Free with attribution; caching and terms are described in the API documentation.
Related comparisons
Hubs: VNQ correlations · XLV correlations
