XLF vs XLI: Correlation & Overlap
How closely do Financial Select Sector SPDR Fund (XLF) and Industrial Select Sector SPDR Fund (XLI) trade together? Their weekly returns over three years give a correlation of 0.79, which is strong. 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 XLF and XLI?
On 3 years of weekly data the XLF/XLI correlation comes out at 0.79, strong. The past 12 months show a weaker link (0.55) than the 3-year average (0.79). The 5-year figure is 0.82, and annualized covariance runs at 201.2 %².
By 3-year correlation, XLI places #22 of the 169 assets tracked against XLF. Over the last 12 months XLI came out ahead by 9.0 percentage points (+9.3% against +18.3%). On a rolling one-year basis the correlation drifted between 0.55 and 0.89, 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.
XLF vs XLI: side by side
| XLF (Financial Select Sector SPDR Fund) | XLI (Industrial Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +9.3% | +18.3% |
| 5-year return | +64.2% | +84.0% |
| Volatility (ann.) | 16.2% | 15.7% |
| Beta vs S&P 500 | 0.84 | 0.89 |
| Max drawdown (3Y) | -15.5% | -18.5% |
| Dividend yield | 1.42% | 1.15% |
| Expense ratio | 0.08% | 0.08% |
| Assets under management | $57.9B | $32.9B |
| Sector / category | Sector ETF | Sector ETF |
On the fund side, XLF sits in the Financial category at State Street Investment Management, with $57.9B under management, 77 holdings, a 0.08% expense ratio, a 1.42% trailing dividend yield. XLI is an Industrials fund from State Street Investment Management: $32.9B under management, 83 holdings, a 0.08% expense ratio, a 1.15% trailing dividend yield.
Portfolio overlap between XLF and XLI
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 XLF: JPM (11.61%), BRK.B (11.25%), V (7.74%), MA (5.87%), BAC (4.94%). Only by XLI: CAT (6.68%), GE (6.52%), RTX (5.04%), GEV (4.52%), UNP (3.25%).
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 | XLF | XLI |
|---|---|---|
| 2022 | -10.6% | -5.6% |
| 2023 | +12.0% | +18.1% |
| 2024 | +30.6% | +17.3% |
| 2025 | +14.9% | +19.3% |
| 2026 | +6.6% | +15.9% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are XLF and XLI good diversifiers for each other?
Only partially. A correlation of 0.79 means XLF and XLI share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
FAQ
What is the correlation between XLF and XLI?
Using weekly returns as of 2026-08-27: 0.79 over 3 years, with 0.55 over the last year and 0.82 over 5 years.
Is XLI a good diversifier for XLF?
Only partially. A correlation of 0.79 means XLF and XLI share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
How much do XLF and XLI 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/xlf-vs-xli.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/xlf-vs-xli/)
No key needed, free to use. Full endpoint list in the API documentation.
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Hubs: XLF correlations · XLI correlations
