RWT vs STWD: Correlation
Redwood Trust, Inc. (RWT) and STARWOOD PROPERTY TRUST, INC. Starwood Property Trust Inc. (STWD) show a strong relationship: their 3-year correlation of weekly returns is 0.61.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are RWT and STWD?
Across a 3-year window, the weekly returns of RWT and STWD correlate at 0.61, strong. Recent behaviour matches the longer record: 0.56 over 1 year against 0.61 over 3. Stretching to 5 years gives 0.67, with an annualized covariance of 370.8 %².
Within RWT's tracked universe of 12 assets, STWD comes in at #4 by 3-year correlation. Neither side won the trailing year by much: -11.8% against -11.8%. Note the risk asymmetry: RWT runs 1.6 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.
RWT vs STWD: side by side
| RWT (Redwood Trust, Inc.) | STWD (STARWOOD PROPERTY TRUST, INC. Starwood Property Trust Inc.) | |
|---|---|---|
| 1-year return | -11.8% | -11.8% |
| 5-year return | -35.7% | +0.5% |
| Volatility (ann.) | 31.6% | 19.3% |
| Beta vs S&P 500 | 0.87 | 0.65 |
| Max drawdown (3Y) | -33.8% | -15.8% |
| Market cap | $0.6B | $6.1B |
| P/E (trailing) | – | 27.0 |
| Dividend yield | 15.62% | 12.07% |
| Sector / category | US Listed | US Listed |
Year-by-year returns
| Year | RWT | STWD |
|---|---|---|
| 2022 | -42.3% | -17.3% |
| 2023 | +21.6% | +26.7% |
| 2024 | -2.6% | -0.6% |
| 2025 | -4.1% | +4.9% |
| 2026 | -10.2% | -6.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are RWT and STWD good diversifiers for each other?
Somewhat, no more. With 0.61 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between RWT and STWD?
The RWT/STWD correlation stands at 0.61 on a 3-year window (1 year: 0.56, 5 years: 0.67), computed from weekly returns as of 2026-08-27.
Is STWD a good diversifier for RWT?
Somewhat, no more. With 0.61 correlation, most large moves hit both names, and the diversification benefit stays modest.
What does a correlation of 0.61 mean?
On the −1 to +1 scale, 0.61 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: RWT correlations · STWD correlations
