Railroads and Homes: What Railroad Stock is Most Correlated with Homebuilders

With homebuilders slowly, slowly on the mend, I was curious just what the satellite beneficiaries of any lasting recovery in homebuilding are. There are the obvious ones such as appliance makers (Whirlpool, etc.) and home improvement stores (Lowes and Home Depot). It was a shot in the dark but I wanted to see if there was anyone in transportation that was correlated with homebuilders. As a starting point, I considered railroads, which haul commodities and raw materials across the country. Calculating the correlations between leading homebuilders (TOL, DHI, PHM, LEN) and railroads (CSX, KSU, NSC, UNP) over the past 10-year span. It turns out if there is a connection, it is not at all clear. For TOL, the luxury homebuilder operating on both coasts, the correlation coefficient is very, very low and may either be positive or negative. Lennar, Pulte, and DH Horton appear to have a significant negative correlation to all four railroads.

The strongest correlation is between KSU and TOL. For NSC and TOL, note that about 1/10th of Norfolk's revenues come from hauling metals and construction materials including brick and cement.

"CSX", "KSU", "NSC", "UNP", "LEN", "PHM", "DHI", "TOL"
[[ 1.        ,  0.9227771 ,  0.96305861,  0.95654626, -0.51462037,
        -0.60367747, -0.36129913, -0.1042525 ],
       [ 0.9227771 ,  1.        ,  0.93120173,  0.96344464, -0.28884962,
        -0.44944239, -0.16605286,  0.05288716],
       [ 0.96305861,  0.93120173,  1.        ,  0.93354555, -0.38596351,
        -0.45196275, -0.20670427,  0.04849845],
       [ 0.95654626,  0.96344464,  0.93354555,  1.        , -0.44989026,
        -0.59985824, -0.3203473 , -0.08247585],
       [-0.51462037, -0.28884962, -0.38596351, -0.44989026,  1.        ,
         0.92695554,  0.93860533,  0.73458592],
       [-0.60367747, -0.44944239, -0.45196275, -0.59985824,  0.92695554,
         1.        ,  0.93068006,  0.77841425],
       [-0.36129913, -0.16605286, -0.20670427, -0.3203473 ,  0.93860533,
         0.93068006,  1.        ,  0.88519053],
       [-0.1042525 ,  0.05288716,  0.04849845, -0.08247585,  0.73458592,
         0.77841425,  0.88519053,  1.        ]])