VYM vs XLE: Correlation & Overlap
Measured on weekly returns over the past three years, Vanguard High Dividend Yield ETF (VYM) and Energy Select Sector SPDR Fund (XLE) carry a correlation of 0.47, a moderate link. By holdings, the two funds overlap 8.7% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are VYM and XLE?
Over the past 3 years, VYM and XLE moved with a correlation of 0.47, which is moderate. Lately the two have drifted apart, with the 1-year correlation at 0.05 versus 0.47 over 3 years. Over 5 years the correlation is 0.54, and the annualized covariance of weekly returns is 132.0 %².
Within VYM's tracked universe of 122 assets, XLE comes in at #104 by 3-year correlation. Correlation aside, the last 12 months split them widely, with XLE ahead by 22.9 points (+21.1% versus +44.0%). This link changes with the market regime, having swung between 0.06 and 0.73 on a rolling one-year basis. 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.
VYM vs XLE: side by side
| VYM (Vanguard High Dividend Yield ETF) | XLE (Energy Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +21.1% | +44.0% |
| 5-year return | +76.6% | +206.7% |
| Volatility (ann.) | 12.3% | 23.1% |
| Beta vs S&P 500 | 0.69 | 0.27 |
| Max drawdown (3Y) | -14.5% | -20.1% |
| Dividend yield | 2.24% | 2.55% |
| Expense ratio | 0.04% | 0.08% |
| Assets under management | $99.2B | $39.2B |
| Sector / category | ETF · Dividend | Sector ETF |
VYM, Vanguard's Large Value fund, carries $99.2B under management, 604 holdings, a 0.04% expense ratio, a 2.24% 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 VYM and XLE
The two portfolios are largely distinct: 8.7% of the funds' weight sits in the same underlying holdings (20 common positions). Correlation tells you they move together; overlap tells you why.
| Common holding | Weight in VYM | Weight in XLE |
|---|---|---|
| XOM | 2.63% | 20.03% |
| CVX | 1.49% | 14.84% |
| COP | 0.60% | 6.30% |
| MPC | 0.38% | 5.40% |
| VLO | 0.38% | 5.05% |
| WMB | 0.35% | 3.84% |
| PSX | 0.35% | 5.37% |
| EOG | 0.32% | 4.24% |
| SLB | 0.30% | 4.46% |
| KMI | 0.25% | 3.72% |
| BKR | 0.24% | 3.65% |
| TRGP | 0.23% | 3.74% |
| OKE | 0.23% | 3.55% |
| DVN | 0.21% | 3.20% |
| OXY | 0.17% | 2.52% |
Largest positions held only by VYM: AVGO (7.37%), JPM (3.83%), JNJ (2.51%), CSCO (1.87%), ABBV (1.81%). Only by XLE: TPL (1.27%), 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 | VYM | XLE |
|---|---|---|
| 2022 | -0.4% | +64.3% |
| 2023 | +6.6% | -0.6% |
| 2024 | +17.6% | +5.6% |
| 2025 | +15.4% | +7.9% |
| 2026 | +15.9% | +41.2% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VYM and XLE good diversifiers for each other?
Yes, to a useful degree: a correlation of 0.47 leaves real independence between the two, which historically damped combined volatility.
FAQ
What is the correlation between VYM and XLE?
The VYM/XLE correlation stands at 0.47 on a 3-year window (1 year: 0.05, 5 years: 0.54), computed from weekly returns as of 2026-08-27.
Is XLE a good diversifier for VYM?
Yes, to a useful degree: a correlation of 0.47 leaves real independence between the two, which historically damped combined volatility.
How much do VYM and XLE overlap?
The two funds share 20 holdings amounting to 8.7% of weight, per issuer portfolio files dated 2026-07-31.
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