XLB vs XLY: Correlation & Overlap
How closely do Materials Select Sector SPDR Fund (XLB) and Consumer Discretionary Select Sector SPDR Fund (XLY) trade together? Their weekly returns over three years give a correlation of 0.53, 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 XLY?
Across a 3-year window, the weekly returns of XLB and XLY correlate at 0.53, moderate. Lately the two have drifted apart, with the 1-year correlation at 0.32 versus 0.53 over 3 years. Stretching to 5 years gives 0.63, with an annualized covariance of 175.2 %².
Within XLB's tracked universe of 140 assets, XLY comes in at #99 by 3-year correlation. The last year tells two different stories: XLB led by 17.7 percentage points, +17.6% for XLB against -0.1% for XLY. Across three years, the rolling one-year figure varied moderately, from 0.33 to 0.77.
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 XLY: side by side
| XLB (Materials Select Sector SPDR Fund) | XLY (Consumer Discretionary Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +17.6% | -0.1% |
| 5-year return | +36.9% | +31.8% |
| Volatility (ann.) | 16.7% | 19.7% |
| Beta vs S&P 500 | 0.72 | 1.15 |
| Max drawdown (3Y) | -23.2% | -26.0% |
| Dividend yield | 1.68% | 0.78% |
| Expense ratio | 0.08% | 0.08% |
| Assets under management | $8.3B | $22.5B |
| 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. XLY is a Consumer Cyclical fund from State Street Investment Management: $22.5B under management, 47 holdings, a 0.08% expense ratio, a 0.78% trailing dividend yield.
Portfolio overlap between XLB and XLY
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 XLY: AMZN (24.32%), TSLA (16.18%), HD (5.54%), MCD (4.11%), BKNG (4.04%).
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 | XLY |
|---|---|---|
| 2022 | -12.3% | -36.3% |
| 2023 | +12.5% | +39.6% |
| 2024 | +0.1% | +26.5% |
| 2025 | +9.9% | +7.4% |
| 2026 | +18.3% | -2.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are XLB and XLY good diversifiers for each other?
To a limited degree. At 0.53 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
FAQ
What is the correlation between XLB and XLY?
The XLB/XLY correlation stands at 0.53 on a 3-year window (1 year: 0.32, 5 years: 0.63), computed from weekly returns as of 2026-08-27.
Is XLY a good diversifier for XLB?
To a limited degree. At 0.53 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
How much do XLB and XLY overlap?
0% by weight, across 0 common holdings, based on issuer-disclosed portfolios as of 2026-08-26.
Use this data
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Hubs: XLB correlations · XLY correlations
