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Has Pioneer Natural Resources Stock Started a New Uptrend?

PART:
1 2 3 4 5
Part 2
Has Pioneer Natural Resources Stock Started a New Uptrend? PART 2 OF 5

What Really Moved Pioneer Natural Resources Stock Last Week?

Pioneer Natural Resources’ correlations last week

As we have seen in the previous part, Pioneer Natural Resources (PXD) stock rose more than 5% last week. Even crude oil moved up by 1.5% in the same week. But natural gas and the SPDR S&P 500 ETF (SPY) were flattish. Thus, PXD’s stock price got a boost from rising crude oil prices. In this part, we’ll try to quantify the relationship between PXD stock and crude oil prices by studying PXD stock’s correlation coefficient with crude oil over the last one week and the last one month. We’ll also look at the extent to which PXD’s stock price followed natural gas prices and the S&P 500 Index during these same timeframes.

What Really Moved Pioneer Natural Resources Stock Last Week?

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For the week ending September 22, Pioneer Natural Resources (PXD) had a high correlation of ~82% with crude oil (USO) (SCO), which means that movements in crude oil had a very high impact on PXD stock. Notably, Pioneer Natural Resources’ production mix contains ~77% liquids (crude oil and natural gas liquids). Thus, PXD tends to have a high correlation with crude oil.

Contrary to crude oil, PXD stock’s correlations with natural gas (UNG) and the SPDR S&P 500 ETF (SPY) were at -82% and -71%, respectively, during the same period. This means that movements in natural gas or the S&P 500 Index had a negligible influence on PXD’s stock rise last week.

PXD’s stock has shown correlations of ~93%, ~50%, and ~77% with crude oil (USO), natural gas (UNG), and the SPDR S&P 500 ETF (SPY) prices, respectively, over the last one month.

Pioneer Natural Resources’ peers

PXD’s peer W&T Offshore (WTI) had shown a correlation of ~79% with crude oil prices last week and rose ~19% along with rising crude prices. WTI had shown a correlation of -90% and -75% with natural gas and the SPDR S&P 500 ETF (SPY) last week. W&T Offshore’s production mix contains ~58% liquids. Thus, WTI has a high correlation with crude oil prices.

To know more about the correlations of various upstream stocks with various energy commodities, refer to Market Realist’s series on How Correlations with Energy Commodities Impact Upstream Stocks.

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