KREF vs STWD: Correlation
How closely do KKR Real Estate Finance Trust Inc. (KREF) and STARWOOD PROPERTY TRUST, INC. Starwood Property Trust Inc. (STWD) trade together? Their weekly returns over three years give a correlation of 0.58, which is moderate.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are KREF and STWD?
Over the past 3 years, KREF and STWD moved with a correlation of 0.58, which is moderate. The link has loosened recently: the 1-year correlation (0.40) runs below the 3-year figure (0.58). Over 5 years the correlation is 0.69, and the annualized covariance of weekly returns is 363.4 %².
Among the 13 assets we track against KREF, STWD ranks #4 by 3-year correlation. Twelve-month performance is nearly a tie, at -10.0% for KREF and -11.8% for STWD. Note the risk asymmetry: KREF runs 1.7 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.
KREF vs STWD: side by side
| KREF (KKR Real Estate Finance Trust Inc.) | STWD (STARWOOD PROPERTY TRUST, INC. Starwood Property Trust Inc.) | |
|---|---|---|
| 1-year return | -10.0% | -11.8% |
| 5-year return | -38.4% | +0.5% |
| Volatility (ann.) | 32.2% | 19.3% |
| Beta vs S&P 500 | 0.66 | 0.65 |
| Max drawdown (3Y) | -44.9% | -15.8% |
| Market cap | $0.5B | $6.1B |
| P/E (trailing) | – | 27.0 |
| Dividend yield | 11.26% | 12.07% |
| Sector / category | US Listed | US Listed |
Year-by-year returns
| Year | KREF | STWD |
|---|---|---|
| 2022 | -25.9% | -17.3% |
| 2023 | +9.2% | +26.7% |
| 2024 | -15.8% | -0.6% |
| 2025 | -9.3% | +4.9% |
| 2026 | -2.2% | -6.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are KREF and STWD good diversifiers for each other?
Only partially. A correlation of 0.58 means KREF and STWD 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 KREF and STWD?
Using weekly returns as of 2026-08-27: 0.58 over 3 years, with 0.40 over the last year and 0.69 over 5 years.
Is STWD a good diversifier for KREF?
Only partially. A correlation of 0.58 means KREF and STWD share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
What does a correlation of 0.58 mean?
On the −1 to +1 scale, 0.58 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
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Related comparisons
Hubs: KREF correlations · STWD correlations
