XLF vs XLRE: Correlation & Overlap
Financial Select Sector SPDR Fund (XLF) and Real Estate Select Sector SPDR Fund (XLRE) show a moderate relationship: their 3-year correlation of weekly returns is 0.56. 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 XLRE?
Across a 3-year window, the weekly returns of XLF and XLRE correlate at 0.56, moderate. Lately the two have drifted apart, with the 1-year correlation at 0.30 versus 0.56 over 3 years. Stretching to 5 years gives 0.63, with an annualized covariance of 151.3 %².
By 3-year correlation, XLRE places #104 of the 169 assets tracked against XLF. Their 12-month results are close: +9.3% for XLF against +9.5% for XLRE. The relationship is regime-dependent: the rolling one-year correlation swung between 0.31 and 0.81 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 XLRE: side by side
| XLF (Financial Select Sector SPDR Fund) | XLRE (Real Estate Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +9.3% | +9.5% |
| 5-year return | +64.2% | +11.4% |
| Volatility (ann.) | 16.2% | 16.7% |
| Beta vs S&P 500 | 0.84 | 0.57 |
| Max drawdown (3Y) | -15.5% | -16.6% |
| Dividend yield | 1.42% | 3.12% |
| Expense ratio | 0.08% | 0.08% |
| Assets under management | $57.9B | $8.6B |
| 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, XLRE sits in the Real Estate category at State Street Investment Management, with $8.6B under management, 31 holdings, a 0.08% expense ratio, a 3.12% trailing dividend yield.
Portfolio overlap between XLF and XLRE
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 XLRE: WELL (11.43%), PLD (9.06%), EQIX (7.14%), AMT (5.49%), DLR (5.01%).
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 | XLRE |
|---|---|---|
| 2022 | -10.6% | -26.2% |
| 2023 | +12.0% | +12.4% |
| 2024 | +30.6% | +5.1% |
| 2025 | +14.9% | +2.6% |
| 2026 | +6.6% | +12.4% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are XLF and XLRE good diversifiers for each other?
Somewhat, no more. With 0.56 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between XLF and XLRE?
As of 2026-08-27, the correlation of weekly returns between XLF and XLRE is 0.56 over 3 years, 0.30 over 1 year and 0.63 over 5 years.
Is XLRE a good diversifier for XLF?
Somewhat, no more. With 0.56 correlation, most large moves hit both names, and the diversification benefit stays modest.
How much do XLF and XLRE overlap?
Per the issuers' own portfolio disclosures (2026-08-26), the overlap is 0% by weight over 0 common positions.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/xlf-vs-xlre.json
Embed this badge (it refreshes with the data), with attribution:
[](https://www.pairbook.io/pair/xlf-vs-xlre/)
The core API is free. Terms and every endpoint in the API documentation.
Related comparisons
Hubs: XLF correlations · XLRE correlations
