Energy (XLE) vs Industrials (XLI)
Live side-by-side comparison with current values, changes, and key statistics.
Why This Comparison Matters
XLE versus XLI separates commodity-price-driven cyclicals (energy) from capex-driven cyclicals (industrials). XLE outperformance signals oil-price or inflation-driven rotation. XLI outperformance reflects capex, aerospace recovery, or reshoring trends that benefit industrial demand without requiring higher energy prices.
Cross-Asset Analysis
To orient the reader: Energy (XLE) represents energy Select Sector SPDR Fund and Industrials (XLI) represents industrial Select Sector SPDR Fund, which is why this comparison sits in the ratio pair category on Convex. Sector ratios are among the most durable signals in equity markets, and Energy (XLE) versus Industrials (XLI) encodes a specific rotation theme that recurs across economic cycles. Dividend yield and buyback patterns inside Energy (XLE) and Industrials (XLI) differ enough that the spread shifts in response to payout policy changes in either sector.
Cyclical inflection points are marked by sharp ratio reversals in Energy (XLE)-Industrials (XLI), which is why tactical allocators watch these spreads closely. Flow-driven distortions in Energy (XLE) or Industrials (XLI), particularly from index inclusion effects or ETF concentration, can push the spread away from macro fair value. Rate sensitivity separates Energy (XLE) and Industrials (XLI) at the most fundamental level, with long-duration sectors underperforming when rates rise.
Energy (XLE) and Industrials (XLI) respond to different underlying conditions, and watching the ratio between them is equivalent to watching the underlying macro factor directly. Tactical allocators use ratio momentum and mean reversion together on the Energy (XLE)-Industrials (XLI) pair, recognizing that trends persist but also sooner or later reverse.
90-Day Statistics
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Frequently Asked Questions
What is the relationship between Energy (XLE) and Industrials (XLI)?+
Energy (XLE) and Industrials (XLI) are connected through sector-specific sensitivities to macro variables. When the relevant macro factor shifts, both respond, though with different sensitivities and at different speeds. The spread between Energy (XLE) and Industrials (XLI) captures the specific macro signal that flows through this relationship.
When does Energy (XLE) typically lead Industrials (XLI)?+
Energy (XLE) tends to lead Industrials (XLI) during macro regime shifts that favor one sector over the other. In those periods, moves in Energy (XLE) precede corresponding moves in Industrials (XLI) by days to weeks, depending on the transmission channel and the depth of each market.
How are Energy (XLE) and Industrials (XLI) historically correlated?+
Long-run correlation between Energy (XLE) and Industrials (XLI) varies by regime. Sector pairs show persistent rotation patterns driven by macro regime, with correlation positive on direction but wide on magnitude. The correlation is not stable: it shifts with macro conditions, and the periods when it breaks down are often the most informative moments in the Energy (XLE)-Industrials (XLI) relationship.
What macro conditions drive divergence between Energy (XLE) and Industrials (XLI)?+
Divergence between Energy (XLE) and Industrials (XLI) typically arises from sector composition changes, sector-specific Fed policy effects, or foreign capital flow shifts. When one asset's idiosyncratic drivers dominate, the spread moves in ways that the common macro story does not predict, which is usually a signal to look more carefully at the specific drivers at work in Energy (XLE) or Industrials (XLI).
Is Energy (XLE) a hedge for Industrials (XLI)?+
Sector pairs including Energy (XLE) and Industrials (XLI) are rotation trades, not hedges; both can fall together in a broad market decline. Effective hedging requires matching the hedge to the specific risk being protected, and the Energy (XLE)-Industrials (XLI) pair is best stress-tested under scenarios the investor most worries about before being sized into a real portfolio.
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Data sourced from FRED, CoinGecko, CBOE, and other providers. This page is for informational purposes only and does not constitute financial advice. Past performance does not guarantee future results.