Downstream companies’ returns
Quarterly returns of downstream companies Phillips 66 Company (PSX), Valero Energy Corporation (VLO), Tesoro Corporation (TSO), and Marathon Petroleum Corporation (MPC) in 3Q15 were about -5%, -6.7%, 9.8% and -13.4%, respectively. In 3Q15, the equal-weighted portfolio comprising these stocks lost about 4.2%.
Tesoro’s refining margin per barrel in 2Q15 was $19.13, more sensitive to falls in crude oil price since 4Q14. Daily closing price average of WTI (West Texas Intermediate) crude oil in 3Q15 was about $46.47 per barrel, compared with $57 per barrel in 2Q15. In 3Q15, the S&P 500 Index (SPY) lost about 7.5% on a quarterly basis. In 1Q15, the portfolio outperformed the S&P 500 Index with a quarterly return of about 17%. The chart above illustrates quarterly return of the stocks and the S&P 500 Index.
Correlation of downstream companies with the S&P 500 Index
In 3Q15, correlation of downstream companies Phillips 66 Company, Valero Energy Corporation, Tesoro Corporation, and Marathon Petroleum Corporation with the S&P 500 Index were about 0.7, 0.9, 0.5, and 0.9, respectively. In 3Q15, Marathon Petroleum Corporation’s (MPC) correlation with the S&P 500 Index was about 69% over 2Q15. Marathon’s correlation with the index in 2Q15 was about 0.6.
The chart above illustrates the correlation of stocks with the S&P 500 Index. In 3Q15, the equal-weighted portfolio had a correlation of 0.9 with the S&P 500 Index, up by 76% over 2Q15. In 2Q15, the correlation of the portfolio with the index was 0.5. Though the market was flat for 2Q15, the portfolio lost about 1.3%.