XLC vs XLK: Correlation & Overlap
Communication Services Select Sector SPDR Fund (XLC) and Technology Select Sector SPDR Fund (XLK) show a strong relationship: their 3-year correlation of weekly returns is 0.67. 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 XLC and XLK?
Across a 3-year window, the weekly returns of XLC and XLK correlate at 0.67, strong. The past 12 months show a weaker link (0.53) than the 3-year average (0.67). Stretching to 5 years gives 0.73, with an annualized covariance of 254.6 %².
Within XLC's tracked universe of 91 assets, XLK comes in at #20 by 3-year correlation. Their recent paths diverged sharply: over the last 12 months XLK outperformed by 41.9 percentage points (+1.5% for XLC against +43.4% for XLK). Across three years, the rolling one-year figure varied moderately, from 0.51 to 0.85. Risk is not evenly split, since XLK carries 1.5 times the volatility of the other side.
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.
XLC vs XLK: side by side
| XLC (Communication Services Select Sector SPDR Fund) | XLK (Technology Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +1.5% | +43.4% |
| 5-year return | +37.5% | +145.2% |
| Volatility (ann.) | 16.0% | 24.0% |
| Beta vs S&P 500 | 0.90 | 1.50 |
| Max drawdown (3Y) | -18.0% | -25.7% |
| Dividend yield | 1.32% | 0.45% |
| Expense ratio | 0.08% | 0.08% |
| Assets under management | $21.7B | $115.4B |
| Sector / category | Sector ETF | Sector ETF |
XLC, State Street Investment Management's Communications fund, carries $21.7B under management, 24 holdings, a 0.08% expense ratio, a 1.32% 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 XLC and XLK
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 XLC: META (16.73%), GOOGL (10.29%), GOOG (8.22%), T (5.20%), VZ (4.99%). 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 | XLC | XLK |
|---|---|---|
| 2022 | -37.6% | -27.7% |
| 2023 | +52.8% | +56.0% |
| 2024 | +34.7% | +21.6% |
| 2025 | +23.1% | +24.6% |
| 2026 | -4.8% | +31.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are XLC and XLK good diversifiers for each other?
Somewhat, no more. With 0.67 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between XLC and XLK?
As of 2026-08-27, the correlation of weekly returns between XLC and XLK is 0.67 over 3 years, 0.53 over 1 year and 0.73 over 5 years.
Is XLK a good diversifier for XLC?
Somewhat, no more. With 0.67 correlation, most large moves hit both names, and the diversification benefit stays modest.
How much do XLC 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/xlc-vs-xlk.json
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The core API is free. Terms and every endpoint in the API documentation.
Related comparisons
Hubs: XLC correlations · XLK correlations
