XLK vs XLY: Correlation & Overlap
Measured on weekly returns over the past three years, Technology Select Sector SPDR Fund (XLK) and Consumer Discretionary Select Sector SPDR Fund (XLY) carry a correlation of 0.72, a strong link. By holdings, the two funds overlap 0% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are XLK and XLY?
Across a 3-year window, the weekly returns of XLK and XLY correlate at 0.72, strong. Little has changed lately, as the 1-year reading of 0.62 lands near the 3-year figure. Stretching to 5 years gives 0.78, with an annualized covariance of 339.9 %².
By 3-year correlation, XLY places #23 of the 147 assets tracked against XLK. The last year tells two different stories: XLK led by 43.5 percentage points, +43.4% for XLK against -0.1% for XLY. The rolling one-year correlation stayed in a tight band between 0.63 and 0.83 over the past three years, which points to a structural rather than episodic relationship.
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.
XLK vs XLY: side by side
| XLK (Technology Select Sector SPDR Fund) | XLY (Consumer Discretionary Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +43.4% | -0.1% |
| 5-year return | +145.2% | +31.8% |
| Volatility (ann.) | 24.0% | 19.7% |
| Beta vs S&P 500 | 1.50 | 1.15 |
| Max drawdown (3Y) | -25.7% | -26.0% |
| Dividend yield | 0.45% | 0.78% |
| Expense ratio | 0.08% | 0.08% |
| Assets under management | $115.4B | $22.5B |
| Sector / category | Sector ETF | Sector ETF |
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. 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 XLK 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 XLK: NVDA (13.91%), AAPL (12.61%), MSFT (10.10%), AVGO (4.61%), AMD (4.09%). 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 | XLK | XLY |
|---|---|---|
| 2022 | -27.7% | -36.3% |
| 2023 | +56.0% | +39.6% |
| 2024 | +21.6% | +26.5% |
| 2025 | +24.6% | +7.4% |
| 2026 | +31.3% | -2.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are XLK and XLY good diversifiers for each other?
Somewhat, no more. With 0.72 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between XLK and XLY?
Using weekly returns as of 2026-08-27: 0.72 over 3 years, with 0.62 over the last year and 0.78 over 5 years.
Is XLY a good diversifier for XLK?
Somewhat, no more. With 0.72 correlation, most large moves hit both names, and the diversification benefit stays modest.
How much do XLK and XLY 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: XLK correlations · XLY correlations
