XLF vs XLY: Correlation & Overlap
Financial Select Sector SPDR Fund (XLF) and Consumer Discretionary Select Sector SPDR Fund (XLY) show a strong relationship: their 3-year correlation of weekly returns is 0.64. 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 XLY?
Over the past 3 years, XLF and XLY moved with a correlation of 0.64, which is strong. The past 12 months show a weaker link (0.51) than the 3-year average (0.64). Over 5 years the correlation is 0.68, and the annualized covariance of weekly returns is 202.8 %².
Among the 169 assets we track against XLF, XLY ranks #69 by 3-year correlation. On 12-month performance XLF holds a 9.4-point edge, +9.3% against -0.1%. The rolling one-year correlation moved between 0.39 and 0.78 over the past three years, a moderate range.
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 XLY: side by side
| XLF (Financial Select Sector SPDR Fund) | XLY (Consumer Discretionary Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +9.3% | -0.1% |
| 5-year return | +64.2% | +31.8% |
| Volatility (ann.) | 16.2% | 19.7% |
| Beta vs S&P 500 | 0.84 | 1.15 |
| Max drawdown (3Y) | -15.5% | -26.0% |
| Dividend yield | 1.42% | 0.78% |
| Expense ratio | 0.08% | 0.08% |
| Assets under management | $57.9B | $22.5B |
| 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. 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 XLF and XLY
The two portfolios are largely distinct: 0% of the funds' weight sits in the same underlying holdings (0 common positions). Correlation tells you they move together; overlap tells you why.
Largest positions held only by XLF: JPM (11.61%), BRK.B (11.25%), V (7.74%), MA (5.87%), BAC (4.94%). 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 | XLF | XLY |
|---|---|---|
| 2022 | -10.6% | -36.3% |
| 2023 | +12.0% | +39.6% |
| 2024 | +30.6% | +26.5% |
| 2025 | +14.9% | +7.4% |
| 2026 | +6.6% | -2.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are XLF and XLY good diversifiers for each other?
Somewhat, no more. With 0.64 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between XLF and XLY?
The XLF/XLY correlation stands at 0.64 on a 3-year window (1 year: 0.51, 5 years: 0.68), computed from weekly returns as of 2026-08-27.
Is XLY a good diversifier for XLF?
Somewhat, no more. With 0.64 correlation, most large moves hit both names, and the diversification benefit stays modest.
How much do XLF and XLY overlap?
0% by weight, across 0 common holdings, based on issuer-disclosed portfolios as of 2026-08-26.
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Hubs: XLF correlations · XLY correlations
