XLE vs XLP: Correlation & Overlap
Energy Select Sector SPDR Fund (XLE) and Consumer Staples Select Sector SPDR Fund (XLP) show a weak relationship: their 3-year correlation of weekly returns is 0.20. 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 XLE and XLP?
Across a 3-year window, the weekly returns of XLE and XLP correlate at 0.20, weak. Recent behaviour matches the longer record: 0.23 over 1 year against 0.20 over 3. Stretching to 5 years gives 0.19, with an annualized covariance of 51.5 %².
By 3-year correlation, XLP places #84 of the 121 assets tracked against XLE. Their recent paths diverged sharply: over the last 12 months XLE outperformed by 35.7 percentage points (+44.0% for XLE against +8.3% for XLP). On a rolling one-year basis the correlation drifted between -0.02 and 0.38, a moderate band. One caveat on sizing: XLE is 2.1 times as volatile as the other leg, so an equal-dollar split is far from equal-risk.
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.
XLE vs XLP: side by side
| XLE (Energy Select Sector SPDR Fund) | XLP (Consumer Staples Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +44.0% | +8.3% |
| 5-year return | +206.7% | +34.7% |
| Volatility (ann.) | 23.1% | 11.1% |
| Beta vs S&P 500 | 0.27 | 0.23 |
| Max drawdown (3Y) | -20.1% | -9.7% |
| Dividend yield | 2.55% | 2.58% |
| Expense ratio | 0.08% | 0.08% |
| Assets under management | $39.2B | $14.6B |
| Sector / category | Sector ETF | Sector ETF |
XLE is an Equity Energy fund from State Street Investment Management: $39.2B under management, 22 holdings, a 0.08% expense ratio, a 2.55% 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 XLE and XLP
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 XLE: XOM (20.03%), CVX (14.84%), COP (6.30%), MPC (5.40%), PSX (5.37%). 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 | XLE | XLP |
|---|---|---|
| 2022 | +64.3% | -0.8% |
| 2023 | -0.6% | -0.8% |
| 2024 | +5.6% | +12.2% |
| 2025 | +7.9% | +1.5% |
| 2026 | +41.2% | +10.9% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are XLE and XLP good diversifiers for each other?
Yes, to a useful degree: a correlation of 0.20 leaves real independence between the two, which historically damped combined volatility.
FAQ
What is the correlation between XLE and XLP?
As of 2026-08-27, the correlation of weekly returns between XLE and XLP is 0.20 over 3 years, 0.23 over 1 year and 0.19 over 5 years.
Is XLP a good diversifier for XLE?
Yes, to a useful degree: a correlation of 0.20 leaves real independence between the two, which historically damped combined volatility.
How much do XLE and XLP overlap?
0% by weight, across 0 common holdings, based on issuer-disclosed portfolios as of 2026-08-26.
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