XLI vs XYL: Correlation
Measured on weekly returns over the past three years, Industrial Select Sector SPDR Fund (XLI) and Xylem Inc. (XYL) carry a correlation of 0.67, a strong link.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are XLI and XYL?
Across a 3-year window, the weekly returns of XLI and XYL correlate at 0.67, strong. The past 12 months show a weaker link (0.55) than the 3-year average (0.67). Stretching to 5 years gives 0.71, with an annualized covariance of 253.4 %².
Among the 204 assets we track against XLI, XYL ranks #63 by 3-year correlation. Their recent paths diverged sharply: over the last 12 months XLI outperformed by 39.4 percentage points (+18.3% for XLI against -21.1% for XYL). Across three years, the rolling one-year figure varied moderately, from 0.39 to 0.81. Risk is not evenly split, since XYL carries 1.5 times the volatility of the other side.
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.
XLI vs XYL: side by side
| XLI (Industrial Select Sector SPDR Fund) | XYL (Xylem Inc.) | |
|---|---|---|
| 1-year return | +18.3% | -21.1% |
| 5-year return | +84.0% | -12.5% |
| Volatility (ann.) | 15.7% | 23.9% |
| Beta vs S&P 500 | 0.89 | 0.96 |
| Max drawdown (3Y) | -18.5% | -30.0% |
| Market cap | – | $26.3B |
| P/E (trailing) | – | 26.8 |
| Dividend yield | 1.15% | 1.47% |
| Expense ratio | 0.08% | – |
| Assets under management | $32.9B | – |
| Sector / category | Sector ETF | Industrials |
On the fund side, XLI sits in the Industrials category at State Street Investment Management, with $32.9B under management, 83 holdings, a 0.08% expense ratio, a 1.15% trailing dividend yield.
Year-by-year returns
| Year | XLI | XYL |
|---|---|---|
| 2022 | -5.6% | -6.6% |
| 2023 | +18.1% | +4.8% |
| 2024 | +17.3% | +2.6% |
| 2025 | +19.3% | +18.8% |
| 2026 | +15.9% | -16.7% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Fund exposure
XYL represents 0.47% of XLI's portfolio, so part of any move in XLI is XYL itself, and the correlation between them is partly mechanical.
Are XLI and XYL good diversifiers for each other?
To a limited degree. At 0.67 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
FAQ
What is the correlation between XLI and XYL?
As of 2026-08-27, the correlation of weekly returns between XLI and XYL is 0.67 over 3 years, 0.55 over 1 year and 0.71 over 5 years.
Is XYL a good diversifier for XLI?
To a limited degree. At 0.67 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
What does a correlation of 0.67 mean?
On the −1 to +1 scale, 0.67 describes how much the two returns move together: +1 is lockstep, 0 is independence, negative values mean opposite directions. It says nothing about which performed better.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/xli-vs-xyl.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/xli-vs-xyl/)
The core API is free. Terms and every endpoint in the API documentation.
Related comparisons
Hubs: XLI correlations · XYL correlations
