XLE vs XLU: Correlation & Overlap
How closely do Energy Select Sector SPDR Fund (XLE) and Utilities Select Sector SPDR Fund (XLU) trade together? Their weekly returns over three years give a correlation of 0.28, which is weak. 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 XLU?
On 3 years of weekly data the XLE/XLU correlation comes out at 0.28, weak. The past 12 months show a weaker link (0.14) than the 3-year average (0.28). The 5-year figure is 0.29, and annualized covariance runs at 102.0 %².
Among the 121 assets we track against XLE, XLU ranks #78 by 3-year correlation. Correlation aside, the last 12 months split them widely, with XLE ahead by 39.9 points (+44.0% versus +4.1%). This link changes with the market regime, having swung between 0.04 and 0.55 on a rolling one-year basis.
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 XLU: side by side
| XLE (Energy Select Sector SPDR Fund) | XLU (Utilities Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +44.0% | +4.1% |
| 5-year return | +206.7% | +46.3% |
| Volatility (ann.) | 23.1% | 15.8% |
| Beta vs S&P 500 | 0.27 | 0.26 |
| Max drawdown (3Y) | -20.1% | -13.1% |
| Dividend yield | 2.55% | 2.70% |
| Expense ratio | 0.08% | 0.08% |
| Assets under management | $39.2B | $23.1B |
| 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. XLU is an Utilities fund from State Street Investment Management: $23.1B under management, 31 holdings, a 0.08% expense ratio, a 2.70% trailing dividend yield.
Portfolio overlap between XLE and XLU
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 XLE: XOM (20.03%), CVX (14.84%), COP (6.30%), MPC (5.40%), PSX (5.37%). Only by XLU: NEE (12.94%), SO (7.45%), DUK (7.00%), CEG (6.58%), AEP (4.94%).
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 | XLU |
|---|---|---|
| 2022 | +64.3% | +1.4% |
| 2023 | -0.6% | -7.2% |
| 2024 | +5.6% | +23.3% |
| 2025 | +7.9% | +16.0% |
| 2026 | +41.2% | +2.5% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are XLE and XLU good diversifiers for each other?
Reasonably. At 0.28, XLE and XLU keep a meaningful degree of independence, and combining them has historically reduced portfolio volatility.
FAQ
What is the correlation between XLE and XLU?
The XLE/XLU correlation stands at 0.28 on a 3-year window (1 year: 0.14, 5 years: 0.29), computed from weekly returns as of 2026-08-27.
Is XLU a good diversifier for XLE?
Reasonably. At 0.28, XLE and XLU keep a meaningful degree of independence, and combining them has historically reduced portfolio volatility.
How much do XLE and XLU 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/xle-vs-xlu.json
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Related comparisons
Hubs: XLE correlations · XLU correlations
