Looking to diversify beyond XLU? The ETFs below have the lowest correlation with XLU — 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 XLU.
Best Diversifiers for XLU
1487 ETFs have low correlation with XLU (below 0.3), 53 of which are negatively correlated. The least correlated is ProShares UltraShort Yen (YCS) (Leveraged Currency) with a 1Y correlation of -0.16, roughly unchanged from -0.14 over 5 years.
| Symbol | Name | Correlation 1Y | Correlation 3Y | Correlation 5Y | Risk / Return Rank | Category | Compare |
|---|---|---|---|---|---|---|---|
| ProShares UltraShort Yen | -0.16 | -0.15 | -0.14 | 63 | Leveraged Currency | XLU vs YCS | |
| KraneShares Sustainable Ultra Short Duration Index... | -0.13 | — | — | 95 | Ultrashort Bond | XLU vs KCSH | |
| BlackRock Floating Rate Loan ETF | -0.12 | 0.05 | — | 56 | Bank Loan | XLU vs BRLN | |
| Invesco DB Energy Fund | -0.11 | -0.01 | 0.04 | 71 | Oil & Gas | XLU vs DBE | |
| iShares 0-3 Month Treasury Bond ETF | -0.11 | -0.02 | -0.03 | 100 | Ultrashort Bond | XLU vs SGOV |
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Low-Correlation Stock Ideas
If you're looking for individual stocks that move independently from XLU, these are worth exploring. The table shows U.S. companies ($1B+ market cap) with low correlation to XLU and solid risk/return profiles. The least correlated is Palo Alto Networks, Inc. (PANW) (Technology) with a 1Y correlation of -0.08, down from 0.09 over 5 years.
| Symbol | Name | Correlation 1Y | Correlation 3Y | Correlation 5Y | Risk / Return Rank | Sector |
|---|---|---|---|---|---|---|
| Palo Alto Networks, Inc. | -0.08 | 0.02 | 0.09 | 72 | Technology | |
| International Seaways, Inc. | -0.06 | 0.04 | 0.06 | 95 | Energy | |
| Oracle Corporation | -0.04 | 0.06 | 0.18 | 62 | Technology | |
| Fortinet, Inc. | -0.02 | 0.07 | 0.16 | 67 | Technology | |
| Hafnia Limited | -0.02 | — | — | 83 | Industrials |
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