XLB vs XLRE: Correlation & Overlap
How closely do Materials Select Sector SPDR Fund (XLB) and Real Estate Select Sector SPDR Fund (XLRE) trade together? Their weekly returns over three years give a correlation of 0.63, which is strong. By holdings, the two funds overlap 0% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are XLB and XLRE?
Across a 3-year window, the weekly returns of XLB and XLRE correlate at 0.63, strong. The past 12 months show a weaker link (0.47) than the 3-year average (0.63). Stretching to 5 years gives 0.69, with an annualized covariance of 176.4 %².
Among the 140 assets we track against XLB, XLRE ranks #52 by 3-year correlation. Over the last 12 months XLB came out ahead by 8.1 percentage points (+17.6% against +9.5%). The rolling one-year correlation moved between 0.48 and 0.81 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 XLRE: side by side
| XLB (Materials Select Sector SPDR Fund) | XLRE (Real Estate Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +17.6% | +9.5% |
| 5-year return | +36.9% | +11.4% |
| Volatility (ann.) | 16.7% | 16.7% |
| Beta vs S&P 500 | 0.72 | 0.57 |
| Max drawdown (3Y) | -23.2% | -16.6% |
| Dividend yield | 1.68% | 3.12% |
| Expense ratio | 0.08% | 0.08% |
| Assets under management | $8.3B | $8.6B |
| 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, XLRE sits in the Real Estate category at State Street Investment Management, with $8.6B under management, 31 holdings, a 0.08% expense ratio, a 3.12% trailing dividend yield.
Portfolio overlap between XLB and XLRE
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 XLRE: WELL (11.43%), PLD (9.06%), EQIX (7.14%), AMT (5.49%), DLR (5.01%).
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 | XLRE |
|---|---|---|
| 2022 | -12.3% | -26.2% |
| 2023 | +12.5% | +12.4% |
| 2024 | +0.1% | +5.1% |
| 2025 | +9.9% | +2.6% |
| 2026 | +18.3% | +12.4% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are XLB and XLRE good diversifiers for each other?
Only partially. A correlation of 0.63 means XLB and XLRE 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 XLRE?
As of 2026-08-27, the correlation of weekly returns between XLB and XLRE is 0.63 over 3 years, 0.47 over 1 year and 0.69 over 5 years.
Is XLRE a good diversifier for XLB?
Only partially. A correlation of 0.63 means XLB and XLRE share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
How much do XLB and XLRE overlap?
Per the issuers' own portfolio disclosures (2026-08-26), the overlap is 0% by weight over 0 common positions.
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Related comparisons
Hubs: XLB correlations · XLRE correlations
