Which ETFs diversify a portfolio of VOO 60% and QQQ 40% the most?
Over the 156 weeks to 2026-10-13, among 29 large US ETFs, the bond ETF with the lowest weekly correlation with VOO 60% and QQQ 40% was SHY, at 0.01, the sector stock ETF XLE, at 0.10, and the commodity ETF GLD, at 0.14.
Correlation measures how two ETFs move together: 1 means always together, 0 means no link, below 0 means opposite.
Measurement, not investment advice.
What are the top 3 ETFs that diversify the portfolio most?
Out of the 29 large US ETFs of the list, the lowest weekly correlation with the portfolio, one ETF per group so that the 3 are different kinds of exposure, lowest first.
1Bonds
iShares 1-3 Year Treasury Bond ETF
0.01weekly correlation with the portfolio
Moved almost independently of the portfolio
- When the portfolio fell-0.31 correlation over the 63 weeks the portfolio fell: it tended to move the other way
- With 10% in it14.4% volatility, instead of 16.0% without it
2Sector stocks
Energy Select Sector SPDR Fund
0.10weekly correlation with the portfolio
Moved almost independently of the portfolio
- When the portfolio fell0.65 correlation over the 63 weeks the portfolio fell: it moved mostly with it
- With 10% in it14.8% volatility, instead of 16.0% without it
3Commodities
SPDR Gold Shares
0.14weekly correlation with the portfolio
Moved almost independently of the portfolio
- When the portfolio fell0.21 correlation over the 63 weeks the portfolio fell: it moved partly with it
- With 10% in it14.8% volatility, instead of 16.0% without it
How do the other 26 ETFs of the list compare?
The top 3 take one ETF per group; the others follow from 4, lowest correlation first, each with its weekly correlation with the portfolio and its correlation over the weeks the portfolio fell.
4IEFBonds
iShares 7-10 Year Treasury Bond ETF
0.04Moved almost independently of the portfolio
When the portfolio fell: -0.34
5TLTBonds
iShares 20+ Year Treasury Bond ETF
0.07Moved almost independently of the portfolio
When the portfolio fell: -0.32
6BNDBonds
Vanguard Total Bond Market ETF
0.13Moved almost independently of the portfolio
When the portfolio fell: -0.28
7TIPBonds
iShares TIPS Bond ETF
0.15Moved almost independently of the portfolio
When the portfolio fell: -0.13
8XLUSector stocks
Utilities Select Sector SPDR Fund
0.16Moved almost independently of the portfolio
When the portfolio fell: 0.15
9XLPSector stocks
Consumer Staples Select Sector SPDR Fund
0.23Moved partly with the portfolio
When the portfolio fell: 0.10
Show the other 20
10LQDBonds
iShares iBoxx Investment Grade Corporate Bond ETF
0.26Moved partly with the portfolio
When the portfolio fell: -0.20
11XLVSector stocks
Health Care Select Sector SPDR Fund
0.33Moved partly with the portfolio
When the portfolio fell: 0.21
12IGFSector stocks
iShares Global Infrastructure ETF
0.40Moved partly with the portfolio
When the portfolio fell: 0.28
13VNQSector stocks
Vanguard Real Estate ETF
0.41Moved partly with the portfolio
When the portfolio fell: 0.31
14SCHDUS stocks, lowest of its group
Schwab US Dividend Equity ETF
0.49Moved partly with the portfolio
When the portfolio fell: 0.52
15VNQISector stocks
Vanguard Global ex-U.S. Real Estate ETF
0.52Moved mostly with the portfolio
When the portfolio fell: 0.24
16AVUVUS stocks
Avantis U.S. Small Cap Value ETF
0.59Moved mostly with the portfolio
When the portfolio fell: 0.53
17HYGBonds
iShares iBoxx High Yield Corporate Bond ETF
0.63Moved mostly with the portfolio
When the portfolio fell: 0.39
18AVDVInternational stocks, lowest of its group
Avantis International Small Cap Value ETF
0.65Moved mostly with the portfolio
When the portfolio fell: 0.60
19USMVUS stocks
iShares MSCI USA Min Vol Factor ETF
0.66Moved mostly with the portfolio
When the portfolio fell: 0.53
20VWOEmerging market stocks, lowest of its group
Vanguard FTSE Emerging Markets ETF
0.71Moved mostly with the portfolio
When the portfolio fell: 0.53
22VEAInternational stocks
Vanguard FTSE Developed Markets ETF
0.72Moved mostly with the portfolio
When the portfolio fell: 0.57
23IWMUS stocks
iShares Russell 2000 ETF
0.73Moved mostly with the portfolio
When the portfolio fell: 0.61
24VXUSInternational stocks
Vanguard Total International Stock ETF
0.75Moved mostly with the portfolio
When the portfolio fell: 0.58
25RSPUS stocks
Invesco S&P 500 Equal Weight ETF
0.77Moved mostly with the portfolio
When the portfolio fell: 0.67
27MTUMUS stocks
iShares MSCI USA Momentum Factor ETF
0.89Moved closely with the portfolio
When the portfolio fell: 0.81
28QUALUS stocks
iShares MSCI USA Quality Factor ETF
0.95Moved closely with the portfolio
When the portfolio fell: 0.86
29VTIUS stocks
Vanguard Total Stock Market ETF
0.98Moved closely with the portfolio
When the portfolio fell: 0.95
Weekly returns over the 156 weeks to 2026-10-13; down weeks are the 63 weeks the portfolio's weekly return was below zero. QQQ is in the list and held, so it is left out. Overlap by weight from the issuer files of 2026-08-31 to 2026-10-13.
How did $100 grow in the portfolio, SHY, XLE and GLD?
The same 156 weeks for every line, to 2026-10-13. Where a coloured line moves differently from the black one, that ETF moved differently from the portfolio.
$100 in the portfolio became $201 over the 156 weeks from 2023-10-20 to 2026-10-13; in SHY $112, in XLE $161 and in GLD $208. Each line compounds the weekly returns the correlations are measured on.
How closely did SHY, XLE and GLD follow the portfolio, week by week?
The flatter the cloud, the less the ETF follows the portfolio.
Each dot is one of the 156 weeks to 2026-10-13. Its position across is the weekly return of VOO 60% and QQQ 40%, and its height is the weekly return of the ETF named on the panel.
- The 63 down weeks, when your ETFs fell (left of the zero line)
- The other 93 weeks
SHY
Correlation 0.01, on down weeks -0.31
XLE
Correlation 0.10, on down weeks 0.65
GLD
Correlation 0.14, on down weeks 0.21
The panels use the same weeks and weekly returns as the correlations above. In every panel, the scale across runs from -10% to +10% and the scale up from -20% to +20%. The weekly returns come from the fund files of VOO, QQQ, SHY, XLE and GLD.
How much do SHY, XLE and GLD overlap with VOO 60% and QQQ 40%, and how volatile were they?
Overlap: the weight each ETF holds in companies VOO 60% and QQQ 40% also hold, counted at the smaller weight; the lower, the less it repeats what you hold. Volatility: how much the weekly returns varied, annualised.
| ETF | Weekly correlation156 weeks to 2026-10-13 | On down weeksthe 63 weeks the portfolio fell | Overlapby weight with yours | Volatilityannualised, 156 weeks |
|---|---|---|---|---|
| SHYiShares 1-3 Year Treasury Bond ETFBonds | 0.01 | -0.31 | Holds bonds | 1.6% |
| ||||
| XLEEnergy Select Sector SPDR FundSector stocks | 0.10 | 0.65 | 2.3% | 22.9% |
| ||||
| GLDSPDR Gold SharesCommodities | 0.14 | 0.21 | Holds gold | 18.6% |
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| VOO, QQQyour ETFs, at your weights | 16.0% | |||
| ||||
- With 10% in SHY and 90% in VOO and QQQ at their weights, the portfolio's annualised weekly volatility over the 156 weeks to 2026-10-13 would have been 14.4% instead of 16.0%.
- With 10% in XLE and 90% in VOO and QQQ at their weights, the portfolio's annualised weekly volatility over the 156 weeks to 2026-10-13 would have been 14.8% instead of 16.0%.
- With 10% in GLD and 90% in VOO and QQQ at their weights, the portfolio's annualised weekly volatility over the 156 weeks to 2026-10-13 would have been 14.8% instead of 16.0%.
What do SHY, XLE and GLD hold, next to your portfolio?
Each ETF's weight in mega-cap tech, its largest sector or asset and its largest country outside the US, with your portfolio in the last row for comparison.
| ETF | Holdings file | Mega-cap tech | Largest sector or asset | Largest outside the US |
|---|---|---|---|---|
| SHYiShares 1-3 Year Treasury Bond ETF | SEC Form N-PORT, 2026-05-31 | None | US Treasury notes and bonds 99.0%Money market funds 1.8% | Not measured |
| ||||
| XLEEnergy Select Sector SPDR Fund | Issuer file, 2026-10-13 | 0.0% | Energy 99.8% | None, 99.8% US |
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| GLDSPDR Gold Shares | Trust's own SEC filing, 2026-06-30 | None | Gold 100.0% | Not measured |
| ||||
| Your portfolioVOO 60% and QQQ 40% | 100% looked through | 38.2% | Technology 46.2% | Netherlands 0.5% |
| ||||
Questions and answers
- Which ETF in each group of the list had the lowest weekly correlation with VOO 60% and QQQ 40%?
- SHY 0.01 (bonds), XLE 0.10 (sector stocks), GLD 0.14 (commodities), SCHD 0.49 (US stocks), AVDV 0.65 (international stocks) and VWO 0.71 (emerging market stocks), over the 156 weeks to 2026-10-13, among 29 large US ETFs.
- How did SHY, XLE and GLD move on the weeks the portfolio fell?
- On the 63 weeks the portfolio fell, of the 156 to 2026-10-13, their weekly correlation with VOO 60% and QQQ 40% was -0.31 for SHY, 0.65 for XLE and 0.21 for GLD.
- How would 10% in SHY, XLE or GLD have changed the volatility of VOO 60% and QQQ 40%?
- Over the 156 weeks to 2026-10-13, the annualised weekly volatility of VOO 60% and QQQ 40% was 16.0%; with 10% in SHY it would have been 14.4%, in XLE 14.8%, and in GLD 14.8%.
- How much of XLE is in companies VOO 60% and QQQ 40% also hold?
- 100.0% of XLE's weight is in 21 holdings VOO 60% and QQQ 40% also hold (by ticker); counted at the smaller of the two weights, the overlap is 2.3%. XOM, CVX and BKR account for 0.61, 0.35 and 0.15 points of it. XLE holdings of 2026-10-13.
How each figure is measured, and the order of the table: how the numbers are produced.
The 30 ETFs and the rule
From the ETFs of the list, leaving out any ETF the portfolio holds: in each group, the ETF whose weekly returns had the lowest correlation with the portfolio's over the weeks both have, up to 156, compared before rounding; the answer opens on the 3 groups whose lowest is lowest, and an exact tie keeps the order of the list.
- US stocks
- VTI, RSP, QQQ, VTV, SCHD, VO, IWM, AVUV, USMV, QUAL, MTUM
- Sector stocks
- XLU, XLP, XLV, XLE, VNQ, VNQI, IGF
- International stocks
- VXUS, VEA, AVDV
- Emerging market stocks
- VWO
- Bonds
- BND, SHY, IEF, TLT, TIP, LQD, HYG
- Commodities
- GLD
Chosen on 2026-10-10: 30 large US ETFs across six kinds of exposure, one ETF per exposure, the same list for every portfolio. Left out on purpose: S&P 500 ETFs weighted by company size, near duplicates of VTI; sector ETFs for technology, financials, industrials, consumer discretionary, communication services and materials; Treasury bills; single commodities other than gold; gold miners; bitcoin; and leveraged, inverse and volatility products. The list and its weekly returns as one file: candidates.json.
