XLF vs XLP: Correlation & Overlap
Measured on weekly returns over the past three years, Financial Select Sector SPDR Fund (XLF) and Consumer Staples Select Sector SPDR Fund (XLP) carry a correlation of 0.38, a moderate link. 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 XLP?
On 3 years of weekly data the XLF/XLP correlation comes out at 0.38, moderate. Lately the two have drifted apart, with the 1-year correlation at 0.08 versus 0.38 over 3 years. The 5-year figure is 0.50, and annualized covariance runs at 68.0 %².
Among the 169 assets we track against XLF, XLP ranks #148 by 3-year correlation. Twelve-month performance is nearly a tie, at +9.3% for XLF and +8.3% for XLP. The relationship is regime-dependent: the rolling one-year correlation swung between 0.07 and 0.71 over the past three years, so this pair behaves very differently depending on the market environment.
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 XLP: side by side
| XLF (Financial Select Sector SPDR Fund) | XLP (Consumer Staples Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +9.3% | +8.3% |
| 5-year return | +64.2% | +34.7% |
| Volatility (ann.) | 16.2% | 11.1% |
| Beta vs S&P 500 | 0.84 | 0.23 |
| Max drawdown (3Y) | -15.5% | -9.7% |
| Dividend yield | 1.42% | 2.58% |
| Expense ratio | 0.08% | 0.08% |
| Assets under management | $57.9B | $14.6B |
| 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. On the fund side, XLP sits in the Consumer Defensive category at State Street Investment Management, with $14.6B under management, 35 holdings, a 0.08% expense ratio, a 2.58% trailing dividend yield.
Portfolio overlap between XLF and XLP
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 XLP: WMT (9.62%), COST (8.92%), KO (7.34%), PG (7.10%), PM (6.36%).
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 | XLP |
|---|---|---|
| 2022 | -10.6% | -0.8% |
| 2023 | +12.0% | -0.8% |
| 2024 | +30.6% | +12.2% |
| 2025 | +14.9% | +1.5% |
| 2026 | +6.6% | +10.9% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are XLF and XLP good diversifiers for each other?
Reasonably. At 0.38, XLF and XLP keep a meaningful degree of independence, and combining them has historically reduced portfolio volatility.
FAQ
What is the correlation between XLF and XLP?
Using weekly returns as of 2026-08-27: 0.38 over 3 years, with 0.08 over the last year and 0.50 over 5 years.
Is XLP a good diversifier for XLF?
Reasonably. At 0.38, XLF and XLP keep a meaningful degree of independence, and combining them has historically reduced portfolio volatility.
How much do XLF and XLP overlap?
The two funds share 0 holdings amounting to 0% of weight, per issuer portfolio files dated 2026-08-26.
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Hubs: XLF correlations · XLP correlations
