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Which Stocks Are Most Affected by Natural Gas Prices?

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Jun. 28 2016, Published 6:47 a.m. ET

What’s the correlation?

In this part of the series, we’ll continue looking at upstream companies that are part of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP). We’ll look at upstream companies that operate with a production mix of at least 60% natural gas (UNG) (BOIL) (UGAZ).

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Upstream companies by correlation with natural gas futures

The following upstream companies correlated most closely with natural gas futures between May 27 and June 27, 2016, as evidenced by their correlation percentages:

  • Southwestern Energy (SWN): 78.7%
  • Range Resources (RRC): 71.4%
  • Gulfport Energy (GPOR): 69.9%
  • Memorial Resource Development (MRD): 69.8%
  • Cabot Oil and Gas (COG): 66.5%
  • EXCO Resources (XCO): 60%
  • EQT Corporation (EQT): 57.3%

The following natural gas–weighted stocks correlated the least with natural gas futures over this period:

  • Comstock Resources (CRK): 14.1%
  • WPX Energy (WPX): 32.8%

Previously, natural gas–weighted stocks with high correlations to natural gas futures usually moved with natural gas. On the other hand, stocks with low correlations weren’t impacted as much by natural gas price movements.

In the next part of this series, we’ll see how natural gas–weighted stocks performed compared to natural gas.

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