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Marathon Oil’s Uptrend: Should We Be Worried?

PART:
1 2 3 4
Part 2
Marathon Oil’s Uptrend: Should We Be Worried? PART 2 OF 4

What Really Impacted Marathon Oil Stock Last Week?

Marathon Oil’s correlations last week

As we saw in the previous part of this series, Marathon Oil (MRO) stock rose a marginal 0.26% last week. Crude oil and natural gas rose ~2% and ~7.7%, respectively, that same week. But the SPDR S&P 500 ETF (SPY) fell 0.14%. In this part of the series, we’ll try to quantify the relationship between the daily movements of MRO stock and crude oil prices by looking closely at MRO stock’s correlation coefficient with crude oil over the past week and the past month. We’ll also look at the extent to which MRO stock has followed daily natural gas (UNG) prices and the S&P 500 index over these same time frames.

What Really Impacted Marathon Oil Stock Last Week?

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For the week ended November 10, Marathon Oil (MRO) stock had a correlation of ~86% with crude oil (USO) (SCO). That means that movements in crude oil had a significant influence on MRO stock. The stock’s correlation with the SPDR S&P 500 ETF (SPY) was positive at ~50%, meaning movements in MRO stock were in tandem with the S&P 500 index last week.

Compared to crude oil and the SPDR S&P 500 ETF (SPY), MRO stock’s correlation with natural gas (UNG) was negative at -94%. That means that movements in natural gas had little influence on MRO stock last week.

MRO stock has shown correlations of 92%, 62%, and 87% with crude oil (USO), natural gas (UNG), and the SPDR S&P 500 ETF (SPY), respectively, over the last month.

Marathon Oil’s peers

MRO’s peer Diamondback Energy (FANG) had a correlation of ~62% with crude oil prices last week, rising ~1% due to the increase in crude oil. FANG had a correlation of -54% and -10% with natural gas and the SPDR S&P 500 ETF (SPY), respectively, last week. Diamondback Energy’s production mix is ~73% crude oil, so FANG has a high correlation with crude oil.

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