PANW vs XLK: Correlation
How closely do Palo Alto Networks (PANW) and Technology Select Sector SPDR Fund (XLK) trade together? Their weekly returns over three years give a correlation of 0.51, which is moderate.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are PANW and XLK?
Across a 3-year window, the weekly returns of PANW and XLK correlate at 0.51, moderate. The relationship has been stable: the 1-year correlation (0.44) sits close to the 3-year figure. Stretching to 5 years gives 0.53, with an annualized covariance of 509.5 %².
By 3-year correlation, XLK places #14 of the 30 assets tracked against PANW. Correlation aside, the last 12 months split them widely, with PANW ahead by 60.7 points (+104.1% versus +43.4%). Across three years, the rolling one-year figure varied moderately, from 0.40 to 0.74. Risk is not evenly split, since PANW carries 1.8 times the volatility of the other side.
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.
PANW vs XLK: side by side
| PANW (Palo Alto Networks) | XLK (Technology Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +104.1% | +43.4% |
| 5-year return | +400.7% | +145.2% |
| Volatility (ann.) | 42.0% | 24.0% |
| Beta vs S&P 500 | 1.32 | 1.50 |
| Max drawdown (3Y) | -36.0% | -25.7% |
| Market cap | $312.0B | – |
| P/E (trailing) | 294.5 | – |
| 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 | PANW | XLK |
|---|---|---|
| 2022 | -24.8% | -27.7% |
| 2023 | +111.3% | +56.0% |
| 2024 | +23.4% | +21.6% |
| 2025 | +1.2% | +24.6% |
| 2026 | +107.8% | +31.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Fund exposure
PANW represents 1.84% of XLK's portfolio, so part of any move in XLK is PANW itself, and the correlation between them is partly mechanical.
Are PANW and XLK good diversifiers for each other?
Only partially. A correlation of 0.51 means PANW and XLK share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
FAQ
What is the correlation between PANW and XLK?
The PANW/XLK correlation stands at 0.51 on a 3-year window (1 year: 0.44, 5 years: 0.53), computed from weekly returns as of 2026-08-27.
Is XLK a good diversifier for PANW?
Only partially. A correlation of 0.51 means PANW and XLK share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
What does a correlation of 0.51 mean?
On the −1 to +1 scale, 0.51 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/panw-vs-xlk.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/panw-vs-xlk/)
The core API is free. Terms and every endpoint in the API documentation.
Related comparisons
Hubs: PANW correlations · XLK correlations
