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Reading ConocoPhillips's Winning Performance Last Week

PART:
1 2 3 4
Part 2
Reading ConocoPhillips's Winning Performance Last Week PART 2 OF 4

What’s Moving ConocoPhillips Stock Now?

COP’s correlations last week

ConocoPhillips’ (COP) ~5% stock rise last week (ended September 15, 2017) appears to have been the result of the ~5% rises in crude oil (USO) and natural gas (UNG) during the same week. The SPDR S&P 500 ETF (SPY) rose ~2% last week as well.

In this part of our series, we’ll assess what moved COP’s stock price last week by analyzing the stock’s correlation coefficient with crude oil, natural gas, and the SPDR S&P 500 ETF (SPY). Last week, the S&P 500 Index rose ~1.5%, indicating positive momentum in equities in general.

What&#8217;s Moving ConocoPhillips Stock Now?

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For the week ended September 15, ConocoPhillips’s (COP) stock showed a correlation of ~92% with crude oil (USO) (SCO), which means that movements in crude oil had a very high influence on COP stock. The stock had correlations of ~70% and ~57% with the SPDR S&P 500 ETF (SPY) and natural gas (UNG) prices, respectively, last week.

Based on the daily price changes last week, COP stock was thus influenced to a greater extent by upward movements in crude oil prices than by the upward movements in natural gas prices or the broader equity market. The stock has shown correlations of ~78%, ~48%, and ~88% with crude oil (USO), natural gas (UNG), and the SPDR S&P 500 ETF (SPY) prices, respectively, over the past month.

COP’s peers

By comparison, Southwestern Energy (SWN) showed a correlation of ~95% with natural gas prices last week, rising nearly 11.8% due to the strong rise in natural gas prices. SWN stock showed a correlation of ~75% and ~84% with crude oil and the SPDR S&P 500 ETF (SPY), respectively, last week. Notably, Southwestern Energy’s production mix contains ~90% natural gas and hence SWN tends to have a high correlation with natural gas.

For more on the correlations of upstream stocks with energy commodities, check out Market Realist’s series How Correlations with Energy Commodities Impact Upstream Stocks.

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