XLC vs XLP: Correlation & Overlap
Measured on weekly returns over the past three years, Communication Services Select Sector SPDR Fund (XLC) and Consumer Staples Select Sector SPDR Fund (XLP) carry a correlation of 0.23, a weak link. 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 XLP?
Over the past 3 years, XLC and XLP moved with a correlation of 0.23, which is weak. Lately the two have drifted apart, with the 1-year correlation at -0.04 versus 0.23 over 3 years. Over 5 years the correlation is 0.38, and the annualized covariance of weekly returns is 40.7 %².
By 3-year correlation, XLP places #76 of the 91 assets tracked against XLC. On 12-month performance XLP holds a 6.8-point edge, +1.5% against +8.3%. Do not treat this figure as fixed: across three years the rolling one-year correlation ranged all the way from -0.06 to 0.48.
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 XLP: side by side
| XLC (Communication Services Select Sector SPDR Fund) | XLP (Consumer Staples Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +1.5% | +8.3% |
| 5-year return | +37.5% | +34.7% |
| Volatility (ann.) | 16.0% | 11.1% |
| Beta vs S&P 500 | 0.90 | 0.23 |
| Max drawdown (3Y) | -18.0% | -9.7% |
| Dividend yield | 1.32% | 2.58% |
| Expense ratio | 0.08% | 0.08% |
| Assets under management | $21.7B | $14.6B |
| Sector / category | Sector ETF | Sector ETF |
XLC is a Communications fund from State Street Investment Management: $21.7B under management, 24 holdings, a 0.08% expense ratio, a 1.32% 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 XLC and XLP
The two portfolios are largely distinct, with 0 holdings in common adding up to 0% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
Largest positions held only by XLC: META (16.73%), GOOGL (10.29%), GOOG (8.22%), T (5.20%), VZ (4.99%). 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 | XLC | XLP |
|---|---|---|
| 2022 | -37.6% | -0.8% |
| 2023 | +52.8% | -0.8% |
| 2024 | +34.7% | +12.2% |
| 2025 | +23.1% | +1.5% |
| 2026 | -4.8% | +10.9% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are XLC and XLP good diversifiers for each other?
A fair diversifier. At 0.23, enough of each asset's movement is its own that the pair has smoothed outcomes historically.
FAQ
What is the correlation between XLC and XLP?
As of 2026-08-27, the correlation of weekly returns between XLC and XLP is 0.23 over 3 years, -0.04 over 1 year and 0.38 over 5 years.
Is XLP a good diversifier for XLC?
A fair diversifier. At 0.23, enough of each asset's movement is its own that the pair has smoothed outcomes historically.
How much do XLC 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
$ curl https://www.pairbook.io/api/v1/pairs/xlc-vs-xlp.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/xlc-vs-xlp/)
The core API is free. Terms and every endpoint in the API documentation.
Related comparisons
Hubs: XLC correlations · XLP correlations
