XLC vs XLY: Correlation & Overlap
How closely do Communication Services Select Sector SPDR Fund (XLC) and Consumer Discretionary Select Sector SPDR Fund (XLY) trade together? Their weekly returns over three years give a correlation of 0.74, which is strong. Looking through to holdings, 0% of the two portfolios is the same by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are XLC and XLY?
Across a 3-year window, the weekly returns of XLC and XLY correlate at 0.74, strong. Little has changed lately, as the 1-year reading of 0.74 lands near the 3-year figure. Stretching to 5 years gives 0.75, with an annualized covariance of 233.4 %².
Within XLC's tracked universe of 91 assets, XLY comes in at #16 by 3-year correlation. Neither side won the trailing year by much: +1.5% against -0.1%. On a rolling one-year basis the correlation drifted between 0.52 and 0.85, a moderate band.
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 XLY: side by side
| XLC (Communication Services Select Sector SPDR Fund) | XLY (Consumer Discretionary Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +1.5% | -0.1% |
| 5-year return | +37.5% | +31.8% |
| Volatility (ann.) | 16.0% | 19.7% |
| Beta vs S&P 500 | 0.90 | 1.15 |
| Max drawdown (3Y) | -18.0% | -26.0% |
| Dividend yield | 1.32% | 0.78% |
| Expense ratio | 0.08% | 0.08% |
| Assets under management | $21.7B | $22.5B |
| 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. 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 XLC and XLY
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 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 | XLC | XLY |
|---|---|---|
| 2022 | -37.6% | -36.3% |
| 2023 | +52.8% | +39.6% |
| 2024 | +34.7% | +26.5% |
| 2025 | +23.1% | +7.4% |
| 2026 | -4.8% | -2.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are XLC and XLY good diversifiers for each other?
Somewhat, no more. With 0.74 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between XLC and XLY?
As of 2026-08-27, the correlation of weekly returns between XLC and XLY is 0.74 over 3 years, 0.74 over 1 year and 0.75 over 5 years.
Is XLY a good diversifier for XLC?
Somewhat, no more. With 0.74 correlation, most large moves hit both names, and the diversification benefit stays modest.
How much do XLC and XLY 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 · XLY correlations
