XLC vs XLRE: Correlation & Overlap
Communication Services Select Sector SPDR Fund (XLC) and Real Estate Select Sector SPDR Fund (XLRE) show a moderate relationship: their 3-year correlation of weekly returns is 0.34. 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 XLRE?
On 3 years of weekly data the XLC/XLRE correlation comes out at 0.34, moderate. The past 12 months show a weaker link (0.17) than the 3-year average (0.34). The 5-year figure is 0.49, and annualized covariance runs at 91.1 %².
Among the 91 assets we track against XLC, XLRE ranks #71 by 3-year correlation. On 12-month performance XLRE holds a 8.0-point edge, +1.5% against +9.5%. The relationship is regime-dependent: the rolling one-year correlation swung between 0.06 and 0.67 over the past three years, so this pair behaves very differently depending on the market environment.
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 XLRE: side by side
| XLC (Communication Services Select Sector SPDR Fund) | XLRE (Real Estate Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +1.5% | +9.5% |
| 5-year return | +37.5% | +11.4% |
| Volatility (ann.) | 16.0% | 16.7% |
| Beta vs S&P 500 | 0.90 | 0.57 |
| Max drawdown (3Y) | -18.0% | -16.6% |
| Dividend yield | 1.32% | 3.12% |
| Expense ratio | 0.08% | 0.08% |
| Assets under management | $21.7B | $8.6B |
| 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, 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 XLC and XLRE
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 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 | XLC | XLRE |
|---|---|---|
| 2022 | -37.6% | -26.2% |
| 2023 | +52.8% | +12.4% |
| 2024 | +34.7% | +5.1% |
| 2025 | +23.1% | +2.6% |
| 2026 | -4.8% | +12.4% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are XLC and XLRE good diversifiers for each other?
Reasonably. At 0.34, XLC and XLRE keep a meaningful degree of independence, and combining them has historically reduced portfolio volatility.
FAQ
What is the correlation between XLC and XLRE?
Using weekly returns as of 2026-08-27: 0.34 over 3 years, with 0.17 over the last year and 0.49 over 5 years.
Is XLRE a good diversifier for XLC?
Reasonably. At 0.34, XLC and XLRE keep a meaningful degree of independence, and combining them has historically reduced portfolio volatility.
How much do XLC 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: XLC correlations · XLRE correlations
