Looking to balance out your exposure to MLP? The ETFs below have the lowest correlation with MLP — they tend to move on their own, which can help reduce risk when MLP drops. The stock ideas table highlights individual companies that behave independently from MLP.
Best Diversifiers for MLP
2 ETFs have low correlation with MLP (below 0.3), 0 of which are negatively correlated. The least correlated is State Street Energy Select Sector SPDR ETF (XLE) (Energy Equities) with a 1Y correlation of 0.07, roughly unchanged from 0.15 over 5 years.
| Symbol | Name | Correlation 1Y | Correlation 3Y | Correlation 5Y | Risk / Return Rank | Category | Compare |
|---|---|---|---|---|---|---|---|
| State Street Energy Select Sector SPDR ETF | 0.07 | 0.18 | 0.15 | 70 | Energy Equities | MLP vs XLE | |
| Global X MLP & Energy Infrastructure ETF | 0.13 | 0.23 | 0.18 | 54 | MLPs | MLP vs MLPX | |
| Invesco QQQ ETF | 0.33 | 0.24 | 0.21 | 74 | Nasdaq-100 | MLP vs QQQ | |
| State Street SPDR S&P 500 ETF | 0.44 | 0.33 | 0.27 | 74 | S&P 500 | MLP vs SPY |
Low-Correlation Stock Ideas
If you're looking for individual stocks that move independently from MLP, these are worth exploring. The table shows U.S. companies ($1B+ market cap) with low correlation to MLP and solid risk/return profiles. The least correlated is Phillips 66 (PSX) (Energy) with a 1Y correlation of 0.09, roughly unchanged from 0.14 over 5 years.
| Symbol | Name | Correlation 1Y | Correlation 3Y | Correlation 5Y | Risk / Return Rank | Sector |
|---|---|---|---|---|---|---|
| Phillips 66 | 0.09 | 0.18 | 0.14 | 89 | Energy |
Build a portfolio that complements MLP
Add MLP to the Diversification Analyzer to see how it overlaps with your other holdings and which assets balance it best.
Analyze a portfolio with MLP