NOW vs XLK: Correlation
Measured on weekly returns over the past three years, ServiceNow (NOW) and Technology Select Sector SPDR Fund (XLK) carry a correlation of 0.49, a moderate link.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are NOW and XLK?
Across a 3-year window, the weekly returns of NOW and XLK correlate at 0.49, moderate. The link has loosened recently: the 1-year correlation (0.32) runs below the 3-year figure (0.49). Stretching to 5 years gives 0.61, with an annualized covariance of 508.7 %².
Among the 54 assets we track against NOW, XLK ranks #35 by 3-year correlation. The last year tells two different stories: XLK led by 65.5 percentage points, -22.1% for NOW against +43.4% for XLK. The relationship is regime-dependent: the rolling one-year correlation swung between 0.29 and 0.83 over the past three years, so this pair behaves very differently depending on the market environment. Note the risk asymmetry: NOW runs 1.8 times the annualized volatility of the other leg, so equal-weighting the two is not an equal-risk position.
How is this computed?
Pearson correlation on weekly returns: ρ(A,B) = cov(rA, rB) / (σA · σB), over windows of 52, 156 and 260 weeks. Covariance is annualized (×52) and expressed in %². Full definitions on the methodology page.
NOW vs XLK: side by side
| NOW (ServiceNow) | XLK (Technology Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | -22.1% | +43.4% |
| 5-year return | +7.9% | +145.2% |
| Volatility (ann.) | 43.2% | 24.0% |
| Beta vs S&P 500 | 1.38 | 1.50 |
| Max drawdown (3Y) | -64.5% | -25.7% |
| Market cap | $143.1B | – |
| P/E (trailing) | 78.7 | – |
| Dividend yield | 0.00% | 0.45% |
| Expense ratio | – | 0.08% |
| Assets under management | – | $115.4B |
| Sector / category | Information Technology | Sector ETF |
On the fund side, XLK sits in the Technology category at State Street Investment Management, with $115.4B under management, 73 holdings, a 0.08% expense ratio, a 0.45% trailing dividend yield.
Year-by-year returns
| Year | NOW | XLK |
|---|---|---|
| 2022 | -40.2% | -27.7% |
| 2023 | +82.0% | +56.0% |
| 2024 | +50.1% | +21.6% |
| 2025 | -27.7% | +24.6% |
| 2026 | -9.6% | +31.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Fund exposure
A structural note: 0.87% of XLK is NOW itself, so the fund partly moves with the stock by construction.
Are NOW and XLK good diversifiers for each other?
Yes, to a useful degree: a correlation of 0.49 leaves real independence between the two, which historically damped combined volatility.
FAQ
What is the correlation between NOW and XLK?
Using weekly returns as of 2026-08-27: 0.49 over 3 years, with 0.32 over the last year and 0.61 over 5 years.
Is XLK a good diversifier for NOW?
Yes, to a useful degree: a correlation of 0.49 leaves real independence between the two, which historically damped combined volatility.
What does a correlation of 0.49 mean?
On the −1 to +1 scale, 0.49 describes how much the two returns move together: +1 is lockstep, 0 is independence, negative values mean opposite directions. It says nothing about which performed better.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/now-vs-xlk.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/now-vs-xlk/)
The core API is free. Terms and every endpoint in the API documentation.
Related comparisons
Hubs: NOW correlations · XLK correlations
