XLF vs XLK: Correlation & Overlap
How closely do Financial Select Sector SPDR Fund (XLF) and Technology Select Sector SPDR Fund (XLK) trade together? Their weekly returns over three years give a correlation of 0.49, which is moderate. 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 XLF and XLK?
Over the past 3 years, XLF and XLK moved with a correlation of 0.49, which is moderate. Lately the two have drifted apart, with the 1-year correlation at 0.30 versus 0.49 over 3 years. Over 5 years the correlation is 0.57, and the annualized covariance of weekly returns is 189.7 %².
Among the 169 assets we track against XLF, XLK ranks #118 by 3-year correlation. Correlation aside, the last 12 months split them widely, with XLK ahead by 34.1 points (+9.3% versus +43.4%). On a rolling one-year basis the correlation drifted between 0.25 and 0.74, 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 XLK: side by side
| XLF (Financial Select Sector SPDR Fund) | XLK (Technology Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +9.3% | +43.4% |
| 5-year return | +64.2% | +145.2% |
| Volatility (ann.) | 16.2% | 24.0% |
| Beta vs S&P 500 | 0.84 | 1.50 |
| Max drawdown (3Y) | -15.5% | -25.7% |
| Dividend yield | 1.42% | 0.45% |
| Expense ratio | 0.08% | 0.08% |
| Assets under management | $57.9B | $115.4B |
| Sector / category | Sector ETF | Sector ETF |
XLF, State Street Investment Management's Financial fund, carries $57.9B under management, 77 holdings, a 0.08% expense ratio, a 1.42% trailing dividend yield. On the fund side, XLK sits in the Technology category at State Street Investment Management, with $115.4B under management, 73 holdings, a 0.08% expense ratio, a 0.45% trailing dividend yield.
Portfolio overlap between XLF and XLK
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 XLF: JPM (11.61%), BRK.B (11.25%), V (7.74%), MA (5.87%), BAC (4.94%). Only by XLK: NVDA (13.91%), AAPL (12.61%), MSFT (10.10%), AVGO (4.61%), AMD (4.09%).
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 | XLK |
|---|---|---|
| 2022 | -10.6% | -27.7% |
| 2023 | +12.0% | +56.0% |
| 2024 | +30.6% | +21.6% |
| 2025 | +14.9% | +24.6% |
| 2026 | +6.6% | +31.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are XLF and XLK good diversifiers for each other?
Yes, to a useful degree: a correlation of 0.49 leaves real independence between the two, which historically damped combined volatility.
FAQ
What is the correlation between XLF and XLK?
As of 2026-08-27, the correlation of weekly returns between XLF and XLK is 0.49 over 3 years, 0.30 over 1 year and 0.57 over 5 years.
Is XLK a good diversifier for XLF?
Yes, to a useful degree: a correlation of 0.49 leaves real independence between the two, which historically damped combined volatility.
How much do XLF and XLK overlap?
Per the issuers' own portfolio disclosures (2026-08-26), the overlap is 0% by weight over 0 common positions.
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Hubs: XLF correlations · XLK correlations
