XLB vs XLK: Correlation & Overlap
How closely do Materials Select Sector SPDR Fund (XLB) and Technology Select Sector SPDR Fund (XLK) trade together? Their weekly returns over three years give a correlation of 0.42, which is moderate. The two funds also share 0% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are XLB and XLK?
Across a 3-year window, the weekly returns of XLB and XLK correlate at 0.42, moderate. Lately the two have drifted apart, with the 1-year correlation at 0.16 versus 0.42 over 3 years. Stretching to 5 years gives 0.56, with an annualized covariance of 167.8 %².
Within XLB's tracked universe of 140 assets, XLK comes in at #125 by 3-year correlation. The last year tells two different stories: XLK led by 25.8 percentage points, +17.6% for XLB against +43.4% for XLK. The relationship is regime-dependent: the rolling one-year correlation swung between 0.13 and 0.69 over the past three years, so this pair behaves very differently depending on the market environment.
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 XLK: side by side
| XLB (Materials Select Sector SPDR Fund) | XLK (Technology Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +17.6% | +43.4% |
| 5-year return | +36.9% | +145.2% |
| Volatility (ann.) | 16.7% | 24.0% |
| Beta vs S&P 500 | 0.72 | 1.50 |
| Max drawdown (3Y) | -23.2% | -25.7% |
| Dividend yield | 1.68% | 0.45% |
| Expense ratio | 0.08% | 0.08% |
| Assets under management | $8.3B | $115.4B |
| Sector / category | Sector ETF | Sector ETF |
XLB is a Natural Resources fund from State Street Investment Management: $8.3B under management, 26 holdings, a 0.08% expense ratio, a 1.68% trailing dividend yield. On the fund side, XLK sits in the Technology category at State Street Investment Management, with $115.4B under management, 73 holdings, a 0.08% expense ratio, a 0.45% trailing dividend yield.
Portfolio overlap between XLB and XLK
The two portfolios are largely distinct: 0% of the funds' weight sits in the same underlying holdings (0 common positions). Correlation tells you they move together; overlap tells you why.
Largest positions held only by XLB: LIN (12.94%), NEM (8.02%), FCX (6.48%), SHW (4.87%), ECL (4.80%). Only by XLK: NVDA (13.91%), AAPL (12.61%), MSFT (10.10%), AVGO (4.61%), AMD (4.09%).
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 | XLK |
|---|---|---|
| 2022 | -12.3% | -27.7% |
| 2023 | +12.5% | +56.0% |
| 2024 | +0.1% | +21.6% |
| 2025 | +9.9% | +24.6% |
| 2026 | +18.3% | +31.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are XLB and XLK good diversifiers for each other?
Reasonably. At 0.42, XLB and XLK keep a meaningful degree of independence, and combining them has historically reduced portfolio volatility.
FAQ
What is the correlation between XLB and XLK?
As of 2026-08-27, the correlation of weekly returns between XLB and XLK is 0.42 over 3 years, 0.16 over 1 year and 0.56 over 5 years.
Is XLK a good diversifier for XLB?
Reasonably. At 0.42, XLB and XLK keep a meaningful degree of independence, and combining them has historically reduced portfolio volatility.
How much do XLB and XLK overlap?
0% by weight, across 0 common holdings, based on issuer-disclosed portfolios as of 2026-08-26.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/xlb-vs-xlk.json
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The core API is free. Terms and every endpoint in the API documentation.
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Hubs: XLB correlations · XLK correlations
