XLB vs XLP: Correlation & Overlap
Materials Select Sector SPDR Fund (XLB) and Consumer Staples Select Sector SPDR Fund (XLP) show a moderate relationship: their 3-year correlation of weekly returns is 0.57. 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 XLP?
On 3 years of weekly data the XLB/XLP correlation comes out at 0.57, moderate. The relationship has been stable: the 1-year correlation (0.62) sits close to the 3-year figure. The 5-year figure is 0.57, and annualized covariance runs at 107.2 %².
Within XLB's tracked universe of 140 assets, XLP comes in at #82 by 3-year correlation. The trailing year gives XLB the advantage: +17.6% versus +8.3%, a 9.3-point spread. Stability stands out here, with the rolling one-year correlation confined to 0.48 through 0.71. One caveat on sizing: XLB is 1.5 times as volatile as the other leg, so an equal-dollar split is far from equal-risk.
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 XLP: side by side
| XLB (Materials Select Sector SPDR Fund) | XLP (Consumer Staples Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +17.6% | +8.3% |
| 5-year return | +36.9% | +34.7% |
| Volatility (ann.) | 16.7% | 11.1% |
| Beta vs S&P 500 | 0.72 | 0.23 |
| Max drawdown (3Y) | -23.2% | -9.7% |
| Dividend yield | 1.68% | 2.58% |
| Expense ratio | 0.08% | 0.08% |
| Assets under management | $8.3B | $14.6B |
| Sector / category | Sector ETF | Sector ETF |
XLB, State Street Investment Management's Natural Resources fund, carries $8.3B under management, 26 holdings, a 0.08% expense ratio, a 1.68% trailing dividend yield. On the fund side, XLP sits in the Consumer Defensive category at State Street Investment Management, with $14.6B under management, 35 holdings, a 0.08% expense ratio, a 2.58% trailing dividend yield.
Portfolio overlap between XLB and XLP
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 XLP: WMT (9.62%), COST (8.92%), KO (7.34%), PG (7.10%), PM (6.36%).
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 | XLP |
|---|---|---|
| 2022 | -12.3% | -0.8% |
| 2023 | +12.5% | -0.8% |
| 2024 | +0.1% | +12.2% |
| 2025 | +9.9% | +1.5% |
| 2026 | +18.3% | +10.9% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are XLB and XLP good diversifiers for each other?
Only partially. A correlation of 0.57 means XLB and XLP share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
FAQ
What is the correlation between XLB and XLP?
Using weekly returns as of 2026-08-27: 0.57 over 3 years, with 0.62 over the last year and 0.57 over 5 years.
Is XLP a good diversifier for XLB?
Only partially. A correlation of 0.57 means XLB and XLP share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
How much do XLB and XLP overlap?
The two funds share 0 holdings amounting to 0% of weight, per issuer portfolio files dated 2026-08-26.
Use this data
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Hubs: XLB correlations · XLP correlations
