XLP vs XLRE: Correlation & Overlap
How closely do Consumer Staples Select Sector SPDR Fund (XLP) and Real Estate Select Sector SPDR Fund (XLRE) trade together? Their weekly returns over three years give a correlation of 0.59, which is moderate. 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 XLP and XLRE?
On 3 years of weekly data the XLP/XLRE correlation comes out at 0.59, moderate. The relationship has been stable: the 1-year correlation (0.57) sits close to the 3-year figure. The 5-year figure is 0.63, and annualized covariance runs at 109.4 %².
Among the 110 assets we track against XLP, XLRE ranks #14 by 3-year correlation. Twelve-month performance is nearly a tie, at +8.3% for XLP and +9.5% for XLRE. The rolling one-year correlation stayed in a tight band between 0.49 and 0.73 over the past three years, which points to a structural rather than episodic relationship. Note the risk asymmetry: XLRE runs 1.5 times the annualized volatility of the other leg, so equal-weighting the two is not an equal-risk position.
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.
XLP vs XLRE: side by side
| XLP (Consumer Staples Select Sector SPDR Fund) | XLRE (Real Estate Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +8.3% | +9.5% |
| 5-year return | +34.7% | +11.4% |
| Volatility (ann.) | 11.1% | 16.7% |
| Beta vs S&P 500 | 0.23 | 0.57 |
| Max drawdown (3Y) | -9.7% | -16.6% |
| Dividend yield | 2.58% | 3.12% |
| Expense ratio | 0.08% | 0.08% |
| Assets under management | $14.6B | $8.6B |
| Sector / category | Sector ETF | Sector ETF |
XLP is a Consumer Defensive fund from State Street Investment Management: $14.6B under management, 35 holdings, a 0.08% expense ratio, a 2.58% 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 XLP 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 XLP: WMT (9.62%), COST (8.92%), KO (7.34%), PG (7.10%), PM (6.36%). 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 | XLP | XLRE |
|---|---|---|
| 2022 | -0.8% | -26.2% |
| 2023 | -0.8% | +12.4% |
| 2024 | +12.2% | +5.1% |
| 2025 | +1.5% | +2.6% |
| 2026 | +10.9% | +12.4% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are XLP and XLRE good diversifiers for each other?
To a limited degree. At 0.59 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 XLP and XLRE?
The XLP/XLRE correlation stands at 0.59 on a 3-year window (1 year: 0.57, 5 years: 0.63), computed from weekly returns as of 2026-08-27.
Is XLRE a good diversifier for XLP?
To a limited degree. At 0.59 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
How much do XLP and XLRE overlap?
0% by weight, across 0 common holdings, based on issuer-disclosed portfolios as of 2026-08-26.
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Hubs: XLP correlations · XLRE correlations
