RWT vs SPY: Correlation
Redwood Trust, Inc. (RWT) and SPDR S&P 500 ETF Trust (SPY) show a moderate relationship: their 3-year correlation of weekly returns is 0.40.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are RWT and SPY?
On 3 years of weekly data the RWT/SPY correlation comes out at 0.40, moderate. Lately the two have drifted apart, with the 1-year correlation at 0.22 versus 0.40 over 3 years. The 5-year figure is 0.54, and annualized covariance runs at 182.5 %².
Among the 12 assets we track against RWT, SPY ranks #6 by 3-year correlation. Correlation aside, the last 12 months split them widely, with SPY ahead by 32.4 points (-11.8% versus +20.6%). One caveat on sizing: RWT is 2.2 times as volatile as the other leg, so an equal-dollar split is far from equal-risk.
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.
RWT vs SPY: side by side
| RWT (Redwood Trust, Inc.) | SPY (SPDR S&P 500 ETF Trust) | |
|---|---|---|
| 1-year return | -11.8% | +20.6% |
| 5-year return | -35.7% | +82.4% |
| Volatility (ann.) | 31.6% | 14.5% |
| Beta vs S&P 500 | 0.87 | 1.00 |
| Max drawdown (3Y) | -33.8% | -18.8% |
| Market cap | $0.6B | – |
| P/E (trailing) | – | – |
| Dividend yield | 15.62% | 1.01% |
| Expense ratio | – | 0.09% |
| Assets under management | – | $795.3B |
| Sector / category | US Listed | ETF · US Large Cap |
SPY is a Large Blend fund from State Street Investment Management: $795.3B under management, 504 holdings, a 0.09% expense ratio, a 1.01% trailing dividend yield.
Year-by-year returns
| Year | RWT | SPY |
|---|---|---|
| 2022 | -42.3% | -18.2% |
| 2023 | +21.6% | +26.2% |
| 2024 | -2.6% | +24.9% |
| 2025 | -4.1% | +17.7% |
| 2026 | -10.2% | +13.7% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are RWT and SPY good diversifiers for each other?
A fair diversifier. At 0.40, enough of each asset's movement is its own that the pair has smoothed outcomes historically.
FAQ
What is the correlation between RWT and SPY?
As of 2026-08-27, the correlation of weekly returns between RWT and SPY is 0.40 over 3 years, 0.22 over 1 year and 0.54 over 5 years.
Is SPY a good diversifier for RWT?
A fair diversifier. At 0.40, enough of each asset's movement is its own that the pair has smoothed outcomes historically.
What does a correlation of 0.40 mean?
A reading of 0.40 sits on a scale from −1 (opposite moves) through 0 (unrelated) to +1 (identical moves). Correlation captures direction, not magnitude or performance.
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Related comparisons
Hubs: RWT correlations · SPY correlations
