Looking to diversify beyond XLF? The ETFs below have the lowest correlation with XLF — they tend to move on their own, which can help reduce risk when the rest of your portfolio drops. The stock ideas table highlights individual companies that behave independently from XLF.
Best Diversifiers for XLF
468 ETFs have low correlation with XLF (below 0.3), 31 of which are negatively correlated. The least correlated is United States Gasoline Fund LP (UGA) (Oil & Gas) with a 1Y correlation of -0.20, down from 0.09 over 5 years.
| Symbol | Name | Correlation 1Y | Correlation 3Y | Correlation 5Y | Risk / Return Rank | Category | Compare |
|---|---|---|---|---|---|---|---|
| United States Gasoline Fund LP | -0.20 | -0.05 | 0.09 | 55 | Oil & Gas | XLF vs UGA | |
| First Trust Alternative Absolute Return Strategy E... | -0.15 | -0.04 | 0.02 | 75 | Commodities | XLF vs FAAR | |
| VanEck Commodity Strategy ETF | -0.14 | -0.02 | — | 57 | Commodities | XLF vs PIT | |
| iShares Enhanced Short-Term Bond Active ETF | -0.14 | — | — | 99 | Ultrashort Bond | XLF vs CSHP | |
| ProShares UltraShort Yen | -0.14 | -0.03 | 0.02 | 63 | Leveraged Currency | XLF vs YCS |
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Low-Correlation Stock Ideas
If you're looking for individual stocks that move independently from XLF, these are worth exploring. The table shows U.S. companies ($1B+ market cap) with low correlation to XLF and solid risk/return profiles. The least correlated is Petróleo Brasileiro S.A. - Petrobras (PBR) (Energy) with a 1Y correlation of -0.07, down from 0.20 over 5 years.
| Symbol | Name | Correlation 1Y | Correlation 3Y | Correlation 5Y | Risk / Return Rank | Sector |
|---|---|---|---|---|---|---|
| Petróleo Brasileiro S.A. - Petrobras | -0.07 | 0.13 | 0.20 | 75 | Energy | |
| BP p.l.c. | -0.06 | 0.13 | 0.29 | 77 | Energy | |
| Altria Group, Inc. | -0.06 | 0.20 | 0.29 | 72 | Consumer Defensive | |
| Chevron Corporation | -0.05 | 0.22 | 0.36 | 70 | Energy | |
| Exxon Mobil Corporation | -0.03 | 0.20 | 0.34 | 72 | Energy |
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