XLE vs XLY: Correlation & Overlap
How closely do Energy Select Sector SPDR Fund (XLE) and Consumer Discretionary Select Sector SPDR Fund (XLY) trade together? Their weekly returns over three years give a correlation of 0.03, which is near-zero. 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 XLY?
On 3 years of weekly data the XLE/XLY correlation comes out at 0.03, near zero, meaning they move largely independently. The link has loosened recently: the 1-year correlation (-0.41) runs below the 3-year figure (0.03). The 5-year figure is 0.14, and annualized covariance runs at 15.7 %².
Within XLE's tracked universe of 121 assets, XLY comes in at #108 by 3-year correlation. Correlation aside, the last 12 months split them widely, with XLE ahead by 44.1 points (+44.0% versus -0.1%). Do not treat this figure as fixed: across three years the rolling one-year correlation ranged all the way from -0.41 to 0.39.
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 XLY: side by side
| XLE (Energy Select Sector SPDR Fund) | XLY (Consumer Discretionary Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +44.0% | -0.1% |
| 5-year return | +206.7% | +31.8% |
| Volatility (ann.) | 23.1% | 19.7% |
| Beta vs S&P 500 | 0.27 | 1.15 |
| Max drawdown (3Y) | -20.1% | -26.0% |
| Dividend yield | 2.55% | 0.78% |
| Expense ratio | 0.08% | 0.08% |
| Assets under management | $39.2B | $22.5B |
| 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. 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 XLE and XLY
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 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 | XLE | XLY |
|---|---|---|
| 2022 | +64.3% | -36.3% |
| 2023 | -0.6% | +39.6% |
| 2024 | +5.6% | +26.5% |
| 2025 | +7.9% | +7.4% |
| 2026 | +41.2% | -2.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are XLE and XLY good diversifiers for each other?
Yes. With a correlation of 0.03, XLE and XLY have moved largely independently, which makes them a genuinely diversifying pair by historical standards.
FAQ
What is the correlation between XLE and XLY?
Using weekly returns as of 2026-08-27: 0.03 over 3 years, with -0.41 over the last year and 0.14 over 5 years.
Is XLY a good diversifier for XLE?
Yes. With a correlation of 0.03, XLE and XLY have moved largely independently, which makes them a genuinely diversifying pair by historical standards.
How much do XLE and XLY overlap?
Per the issuers' own portfolio disclosures (2026-08-26), the overlap is 0% by weight over 0 common positions.
Use this data
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Hubs: XLE correlations · XLY correlations
