VOO vs XLE: Correlation & Overlap
How closely do Vanguard S&P 500 ETF (VOO) and Energy Select Sector SPDR Fund (XLE) trade together? Their weekly returns over three years give a correlation of 0.17, which is weak. The two funds also share 3.4% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are VOO and XLE?
On 3 years of weekly data the VOO/XLE correlation comes out at 0.17, weak. Lately the two have drifted apart, with the 1-year correlation at -0.41 versus 0.17 over 3 years. The 5-year figure is 0.28, and annualized covariance runs at 56.5 %².
Within VOO's tracked universe of 124 assets, XLE comes in at #114 by 3-year correlation. Their recent paths diverged sharply: over the last 12 months XLE outperformed by 23.4 percentage points (+20.6% for VOO against +44.0% for XLE). The relationship is regime-dependent: the rolling one-year correlation swung between -0.42 and 0.56 over the past three years, so this pair behaves very differently depending on the market environment. Risk is not evenly split, since XLE carries 1.6 times the volatility of the other side.
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.
VOO vs XLE: side by side
| VOO (Vanguard S&P 500 ETF) | XLE (Energy Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +20.6% | +44.0% |
| 5-year return | +83.0% | +206.7% |
| Volatility (ann.) | 14.4% | 23.1% |
| Beta vs S&P 500 | 0.99 | 0.27 |
| Max drawdown (3Y) | -18.7% | -20.1% |
| Dividend yield | 1.07% | 2.55% |
| Expense ratio | 0.03% | 0.08% |
| Assets under management | $1,686.9B | $39.2B |
| Sector / category | ETF · US Large Cap | Sector ETF |
VOO is a Large Blend fund from Vanguard: $1,686.9B under management, 503 holdings, a 0.03% expense ratio, a 1.07% 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 VOO and XLE
The two portfolios are largely distinct, with 21 holdings in common adding up to 3.4% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
| Common holding | Weight in VOO | Weight in XLE |
|---|---|---|
| XOM | 1.00% | 20.03% |
| CVX | 0.57% | 14.84% |
| COP | 0.23% | 6.30% |
| VLO | 0.14% | 5.05% |
| MPC | 0.14% | 5.40% |
| WMB | 0.14% | 3.84% |
| PSX | 0.13% | 5.37% |
| EOG | 0.12% | 4.24% |
| SLB | 0.12% | 4.46% |
| KMI | 0.10% | 3.72% |
| BKR | 0.09% | 3.65% |
| TRGP | 0.09% | 3.74% |
| OKE | 0.09% | 3.55% |
| DVN | 0.08% | 3.20% |
| OXY | 0.06% | 2.52% |
Largest positions held only by VOO: NVDA (7.56%), AAPL (7.05%), MSFT (5.37%), AMZN (4.13%), GOOGL (3.25%). Only by XLE: IXPU6 (0.01%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-07-31. Top 15 common positions shown.
Year-by-year returns
| Year | VOO | XLE |
|---|---|---|
| 2022 | -18.2% | +64.3% |
| 2023 | +26.3% | -0.6% |
| 2024 | +25.0% | +5.6% |
| 2025 | +17.8% | +7.9% |
| 2026 | +13.7% | +41.2% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VOO and XLE good diversifiers for each other?
Yes: at 0.17, the two have gone their own ways historically, which is what genuine diversification looks like.
FAQ
What is the correlation between VOO and XLE?
Using weekly returns as of 2026-08-27: 0.17 over 3 years, with -0.41 over the last year and 0.28 over 5 years.
Is XLE a good diversifier for VOO?
Yes: at 0.17, the two have gone their own ways historically, which is what genuine diversification looks like.
How much do VOO and XLE overlap?
The two funds share 21 holdings amounting to 3.4% of weight, per issuer portfolio files dated 2026-07-31.
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Hubs: VOO correlations · XLE correlations
