RWT vs VNQ: Correlation
Measured on weekly returns over the past three years, Redwood Trust, Inc. (RWT) and Vanguard Real Estate ETF (VNQ) carry a correlation of 0.60, a strong link.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are RWT and VNQ?
On 3 years of weekly data the RWT/VNQ correlation comes out at 0.60, strong. Lately the two have drifted apart, with the 1-year correlation at 0.44 versus 0.60 over 3 years. The 5-year figure is 0.61, and annualized covariance runs at 312.8 %².
Among the 12 assets we track against RWT, VNQ ranks #5 by 3-year correlation. Correlation aside, the last 12 months split them widely, with VNQ ahead by 22.1 points (-11.8% versus +10.3%). Note the risk asymmetry: RWT runs 1.9 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 VNQ: side by side
| RWT (Redwood Trust, Inc.) | VNQ (Vanguard Real Estate ETF) | |
|---|---|---|
| 1-year return | -11.8% | +10.3% |
| 5-year return | -35.7% | +9.5% |
| Volatility (ann.) | 31.6% | 16.6% |
| Beta vs S&P 500 | 0.87 | 0.59 |
| Max drawdown (3Y) | -33.8% | -17.5% |
| Market cap | $0.6B | – |
| P/E (trailing) | – | – |
| Dividend yield | 15.62% | 3.51% |
| Expense ratio | – | 0.13% |
| Assets under management | – | $73.1B |
| Sector / category | US Listed | ETF · Real Estate |
VNQ is a Real Estate fund from Vanguard: $73.1B under management, 140 holdings, a 0.13% expense ratio, a 3.51% trailing dividend yield.
Year-by-year returns
| Year | RWT | VNQ |
|---|---|---|
| 2022 | -42.3% | -26.3% |
| 2023 | +21.6% | +11.9% |
| 2024 | -2.6% | +4.8% |
| 2025 | -4.1% | +3.2% |
| 2026 | -10.2% | +12.5% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are RWT and VNQ good diversifiers for each other?
Only partially. A correlation of 0.60 means RWT and VNQ 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 RWT and VNQ?
The RWT/VNQ correlation stands at 0.60 on a 3-year window (1 year: 0.44, 5 years: 0.61), computed from weekly returns as of 2026-08-27.
Is VNQ a good diversifier for RWT?
Only partially. A correlation of 0.60 means RWT and VNQ share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
What does a correlation of 0.60 mean?
Correlation ranges from −1 to +1. Values near +1 mean two assets move together, near 0 that they move independently, and negative values that they tend to move in opposite directions. It measures co-movement, not performance.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/rwt-vs-vnq.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/rwt-vs-vnq/)
Free with attribution; caching and terms are described in the API documentation.
Related comparisons
Hubs: RWT correlations · VNQ correlations
