Now let’s compare Anadarko Petroleum’s (APC) recent stock movements to movements in the broader market, crude oil prices, natural gas prices, and the US Dollar Index (or USDX).
As we learned earlier in this series, APC’s stock has fallen almost 16.8% YoY (year-over-year) as of September 19, 2016. Meanwhile, peers Newfield Exploration (NFX) and Apache (APA) have risen ~25% and ~46%, respectively, YoY, in the same period. Together, these companies make up ~11% of the iShares US Oil & Gas Exploration & Production ETF (IEO).
Recent trends in APC’s stock
In the graph above, we can see that Anadarko has been mirroring the price movements of crude oil and natural gas. The correlation coefficient between Anadarko’s stock price and WTI’s (West Texas Intermediate) price (USO) from September 2015 to the present is ~0.67. This indicates a strong positive correlation between the two.
The correlation coefficient between Anadarko’s stock price and the price of natural gas (UNG) from September 2015 to the present is ~0.20. This also indicates a positive but far lower correlation between the two.
The above graph shows that APC’s stock has produced lower returns compared to WTI and natural gas YoY. Compared to the SPDR S&P 500 ETF (SPY), APC has again underperformed. SPY has returned 6.6% since September 2015. Note that APC is negatively correlated to USDX. Since September 2015, USDX has returned 0.72%.
Next, let’s analyze APC’s implied volatility.