Continental Resources’s stock drivers
In this final part of our series on Continental Resources (CLR), we’ll compare the company’s stock movements with respect to movements in the broader market, crude prices, natural gas prices, and the US dollar index (or USDX).
As noted previously in this series, Continental Resources’s stock has fallen by almost 13% year-over-year. CLR’s upstream peers Cimarex Energy (XEC), Concho Resources (CXO), and Hess (HES) have declined by 0.26%, 1.5%, and 16%, respectively, in the same period. These companies make up 8.3% of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) and ~10% of the iShares US Oil & Gas Exploration & Production ETF (IEO).
Recently, Continental Resources’s (CLR) stock has been on an uptrend, mirroring crude oil price movements. In the image above, it’s clear that its performance has been driven mainly by WTI (West Texas Intermediate) crude oil prices.
The correlation coefficient between CLR’s stock price and crude oil prices (USO) from May 2015 to the present is ~0.64. This indicates a strong positive correlation between the two. The graph also indicates that CLR stock has given higher returns compared to WTI’s returns on a year-over-year basis.
When compared to the broader market, the S&P 500 ETF (SPY), CLR has underperformed SPY. As we can see in the graph, CLR is negatively correlated to USDX. Since May 2015, the USDX has returned about ~0.1%.