Redwood Trust Inc (RWT)
Redwood Trust, Inc., is a specialized finance company in the United States. The company is headquartered in Mill Valley, California.
Stock Price Trends
Stock price trends estimated using linear regression.
Key facts
- The primary trend is decreasing.
- The decline rate of the primary trend is 26.30% per annum.
- RWT price at the close of July 26, 2024 was $7.40 and was higher than the top border of the primary price channel by $2.60 (54.14%). This indicates a possible reversal in the primary trend direction.
- The secondary trend is increasing.
- The growth rate of the secondary trend is 3.55% per annum.
- RWT price at the close of July 26, 2024 was inside the secondary price channel.
- The direction of the secondary trend is opposite to the direction of the primary trend. This indicates a possible reversal in the direction of the primary trend.
Linear Regression Model
Model equation:
Yi = α + β × Xi + εi
Top border of price channel:
Exp(Yi) = Exp(a + b × Xi + 2 × s)
Bottom border of price channel:
Exp(Yi) = Exp(a + b × Xi – 2 × s)
where:
i - observation number
Yi - natural logarithm of RWT price
Xi - time index, 1 day interval
σ - standard deviation of εi
a - estimator of α
b - estimator of β
s - estimator of σ
Exp() - calculates the exponent of e
Primary Trend
Start date: May 26, 2021
End date: July 13, 2023
a = 2.8604
b = -0.0008
s = 0.1168
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0008) – 1
= -26.30%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.1168) – 1
= 59.54%
May 26, 2021 calculations
Top border of price channel:
Exp(Y461)
= Exp(a + b × X461 + 2 × s)
= Exp(a + b × 667 + 2 × s)
= Exp(2.8604 + -0.0008 × 667 + 2 × 0.1168)
= Exp(2.5362)
= $12.63
Bottom border of price channel:
Exp(Y461)
= Exp(a + b × X461 – 2 × s)
= Exp(a + b × 667 – 2 × s)
= Exp(2.8604 + -0.0008 × 667 – 2 × 0.1168)
= Exp(2.0691)
= $7.92
July 13, 2023 calculations
Top border of price channel:
Exp(Y996)
= Exp(a + b × X996 + 2 × s)
= Exp(a + b × 1,445 + 2 × s)
= Exp(2.8604 + -0.0008 × 1,445 + 2 × 0.1168)
= Exp(1.8857)
= $6.59
Bottom border of price channel:
Exp(Y996)
= Exp(a + b × X996 – 2 × s)
= Exp(a + b × 1,445 – 2 × s)
= Exp(2.8604 + -0.0008 × 1,445 – 2 × 0.1168)
= Exp(1.4185)
= $4.13
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 26.30% per annum.
- RWT price at the close of July 26, 2024 was $7.40 and was higher than the top border of the primary price channel by $2.60 (54.14%). This indicates a possible reversal in the primary trend direction.
Secondary Trend
Start date: June 10, 2022
End date: July 26, 2024
a = 1.6866
b = 0.0001
s = 0.0921
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0001) – 1
= 3.55%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0921) – 1
= 44.56%
June 10, 2022 calculations
Top border of price channel:
Exp(Y724)
= Exp(a + b × X724 + 2 × s)
= Exp(a + b × 1,047 + 2 × s)
= Exp(1.6866 + 0.0001 × 1,047 + 2 × 0.0921)
= Exp(1.9710)
= $7.18
Bottom border of price channel:
Exp(Y724)
= Exp(a + b × X724 – 2 × s)
= Exp(a + b × 1,047 – 2 × s)
= Exp(1.6866 + 0.0001 × 1,047 – 2 × 0.0921)
= Exp(1.6025)
= $4.97
July 26, 2024 calculations
Top border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 + 2 × s)
= Exp(a + b × 1,824 + 2 × s)
= Exp(1.6866 + 0.0001 × 1,824 + 2 × 0.0921)
= Exp(2.0453)
= $7.73
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(1.6866 + 0.0001 × 1,824 – 2 × 0.0921)
= Exp(1.6768)
= $5.35
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 3.55% per annum.
- RWT price at the close of July 26, 2024 was inside the secondary price channel.