VOO vs XLY: Correlation & Overlap
Vanguard S&P 500 ETF (VOO) and Consumer Discretionary Select Sector SPDR Fund (XLY) show a very strong relationship: their 3-year correlation of weekly returns is 0.85. The two funds also share 9.4% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are VOO and XLY?
On 3 years of weekly data the VOO/XLY correlation comes out at 0.85, very strong, meaning they move nearly in lockstep. Recent behaviour matches the longer record: 0.80 over 1 year against 0.85 over 3. The 5-year figure is 0.88, and annualized covariance runs at 239.5 %².
Among the 124 assets we track against VOO, XLY ranks #30 by 3-year correlation. The last year tells two different stories: VOO led by 20.7 percentage points, +20.6% for VOO against -0.1% for XLY. Stability stands out here, with the rolling one-year correlation confined to 0.81 through 0.90.
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 XLY: side by side
| VOO (Vanguard S&P 500 ETF) | XLY (Consumer Discretionary Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +20.6% | -0.1% |
| 5-year return | +83.0% | +31.8% |
| Volatility (ann.) | 14.4% | 19.7% |
| Beta vs S&P 500 | 0.99 | 1.15 |
| Max drawdown (3Y) | -18.7% | -26.0% |
| Dividend yield | 1.07% | 0.78% |
| Expense ratio | 0.03% | 0.08% |
| Assets under management | $1,686.9B | $22.5B |
| Sector / category | ETF · US Large Cap | Sector ETF |
On the fund side, VOO sits in the Large Blend category at Vanguard, with $1,686.9B under management, 503 holdings, a 0.03% expense ratio, a 1.07% trailing dividend yield. 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.
Portfolio overlap between VOO and XLY
The two portfolios are largely distinct: 9.4% of the funds' weight sits in the same underlying holdings (47 common positions). Correlation tells you they move together; overlap tells you why.
| Common holding | Weight in VOO | Weight in XLY |
|---|---|---|
| AMZN | 4.13% | 24.32% |
| TSLA | 1.36% | 16.18% |
| HD | 0.51% | 5.54% |
| MCD | 0.30% | 4.11% |
| TJX | 0.27% | 3.55% |
| BKNG | 0.23% | 4.04% |
| SBUX | 0.19% | 3.08% |
| LOW | 0.18% | 2.94% |
| MAR | 0.13% | 1.96% |
| ROST | 0.13% | 1.90% |
| GM | 0.12% | 1.94% |
| RCL | 0.12% | 1.80% |
| DASH | 0.12% | 2.24% |
| ORLY | 0.12% | 1.85% |
| HLT | 0.11% | 1.89% |
Largest positions held only by VOO: NVDA (7.56%), AAPL (7.05%), MSFT (5.37%), GOOGL (3.25%), AVGO (2.87%). Only by XLY: .
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 | XLY |
|---|---|---|
| 2022 | -18.2% | -36.3% |
| 2023 | +26.3% | +39.6% |
| 2024 | +25.0% | +26.5% |
| 2025 | +17.8% | +7.4% |
| 2026 | +13.7% | -2.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VOO and XLY good diversifiers for each other?
No: a correlation of 0.85 means VOO and XLY tend to fall together, which is precisely when diversification is supposed to help.
FAQ
What is the correlation between VOO and XLY?
Using weekly returns as of 2026-08-27: 0.85 over 3 years, with 0.80 over the last year and 0.88 over 5 years.
Is XLY a good diversifier for VOO?
No: a correlation of 0.85 means VOO and XLY tend to fall together, which is precisely when diversification is supposed to help.
How much do VOO and XLY overlap?
Per the issuers' own portfolio disclosures (2026-07-31), the overlap is 9.4% by weight over 47 common positions.
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Hubs: VOO correlations · XLY correlations
