XLB vs XLI: Correlation & Overlap
Measured on weekly returns over the past three years, Materials Select Sector SPDR Fund (XLB) and Industrial Select Sector SPDR Fund (XLI) carry a correlation of 0.77, a strong link. Looking through to holdings, 0% of the two portfolios is the same by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are XLB and XLI?
On 3 years of weekly data the XLB/XLI correlation comes out at 0.77, strong. The link has loosened recently: the 1-year correlation (0.59) runs below the 3-year figure (0.77). The 5-year figure is 0.83, and annualized covariance runs at 203.2 %².
Among the 140 assets we track against XLB, XLI ranks #15 by 3-year correlation. Neither side won the trailing year by much: +17.6% against +18.3%. The rolling one-year correlation moved between 0.64 and 0.90 over the past three years, a moderate range.
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.
XLB vs XLI: side by side
| XLB (Materials Select Sector SPDR Fund) | XLI (Industrial Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +17.6% | +18.3% |
| 5-year return | +36.9% | +84.0% |
| Volatility (ann.) | 16.7% | 15.7% |
| Beta vs S&P 500 | 0.72 | 0.89 |
| Max drawdown (3Y) | -23.2% | -18.5% |
| Dividend yield | 1.68% | 1.15% |
| Expense ratio | 0.08% | 0.08% |
| Assets under management | $8.3B | $32.9B |
| Sector / category | Sector ETF | Sector ETF |
On the fund side, XLB sits in the Natural Resources category at State Street Investment Management, with $8.3B under management, 26 holdings, a 0.08% expense ratio, a 1.68% trailing dividend yield. XLI is an Industrials fund from State Street Investment Management: $32.9B under management, 83 holdings, a 0.08% expense ratio, a 1.15% trailing dividend yield.
Portfolio overlap between XLB and XLI
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 XLB: LIN (12.94%), NEM (8.02%), FCX (6.48%), SHW (4.87%), ECL (4.80%). Only by XLI: CAT (6.68%), GE (6.52%), RTX (5.04%), GEV (4.52%), UNP (3.25%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26.
Year-by-year returns
| Year | XLB | XLI |
|---|---|---|
| 2022 | -12.3% | -5.6% |
| 2023 | +12.5% | +18.1% |
| 2024 | +0.1% | +17.3% |
| 2025 | +9.9% | +19.3% |
| 2026 | +18.3% | +15.9% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are XLB and XLI good diversifiers for each other?
Somewhat, no more. With 0.77 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between XLB and XLI?
The XLB/XLI correlation stands at 0.77 on a 3-year window (1 year: 0.59, 5 years: 0.83), computed from weekly returns as of 2026-08-27.
Is XLI a good diversifier for XLB?
Somewhat, no more. With 0.77 correlation, most large moves hit both names, and the diversification benefit stays modest.
How much do XLB and XLI overlap?
Per the issuers' own portfolio disclosures (2026-08-26), the overlap is 0% by weight over 0 common positions.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/xlb-vs-xli.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/xlb-vs-xli/)
No key needed, free to use. Full endpoint list in the API documentation.
Related comparisons
Hubs: XLB correlations · XLI correlations
