XLE vs XLV: Correlation & Overlap
How closely do Energy Select Sector SPDR Fund (XLE) and Health Care Select Sector SPDR Fund (XLV) trade together? Their weekly returns over three years give a correlation of 0.18, which is weak. The two funds also share 0% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are XLE and XLV?
On 3 years of weekly data the XLE/XLV correlation comes out at 0.18, weak. The link has loosened recently: the 1-year correlation (-0.03) runs below the 3-year figure (0.18). The 5-year figure is 0.20, and annualized covariance runs at 62.7 %².
Within XLE's tracked universe of 121 assets, XLV comes in at #87 by 3-year correlation. Correlation aside, the last 12 months split them widely, with XLE ahead by 16.5 points (+44.0% versus +27.5%). The rolling one-year correlation moved between -0.08 and 0.40 over the past three years, a moderate range. Note the risk asymmetry: XLE runs 1.6 times the annualized volatility of the other leg, so equal-weighting the two is not an equal-risk position.
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 XLV: side by side
| XLE (Energy Select Sector SPDR Fund) | XLV (Health Care Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +44.0% | +27.5% |
| 5-year return | +206.7% | +37.4% |
| Volatility (ann.) | 23.1% | 14.7% |
| Beta vs S&P 500 | 0.27 | 0.42 |
| Max drawdown (3Y) | -20.1% | -17.1% |
| Dividend yield | 2.55% | 1.56% |
| Expense ratio | 0.08% | 0.08% |
| Assets under management | $39.2B | $41.7B |
| Sector / category | Sector ETF | Sector ETF |
XLE, State Street Investment Management's Equity Energy fund, carries $39.2B under management, 22 holdings, a 0.08% expense ratio, a 2.55% trailing dividend yield. On the fund side, XLV sits in the Health category at State Street Investment Management, with $41.7B under management, 61 holdings, a 0.08% expense ratio, a 1.56% trailing dividend yield.
Portfolio overlap between XLE and XLV
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 XLV: LLY (15.03%), JNJ (10.38%), ABBV (7.42%), MRK (6.04%), UNH (5.82%).
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 | XLV |
|---|---|---|
| 2022 | +64.3% | -2.1% |
| 2023 | -0.6% | +2.1% |
| 2024 | +5.6% | +2.5% |
| 2025 | +7.9% | +14.5% |
| 2026 | +41.2% | +11.8% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are XLE and XLV good diversifiers for each other?
Yes. With a correlation of 0.18, XLE and XLV have moved largely independently, which makes them a genuinely diversifying pair by historical standards.
FAQ
What is the correlation between XLE and XLV?
Using weekly returns as of 2026-08-27: 0.18 over 3 years, with -0.03 over the last year and 0.20 over 5 years.
Is XLV a good diversifier for XLE?
Yes. With a correlation of 0.18, XLE and XLV have moved largely independently, which makes them a genuinely diversifying pair by historical standards.
How much do XLE and XLV 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-xlv.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/xle-vs-xlv/)
Free with attribution; caching and terms are described in the API documentation.
Related comparisons
Hubs: XLE correlations · XLV correlations
