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How MEP’s Stock Correlates with Commodity Prices

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Correlation with crude oil

Midcoast Energy Partners’s (MEP) stock had a correlation of 0.42 with the near-month WTI (West Texas Intermediate) crude oil futures price over the last 12-month period. In comparison, the Alerian MLP ETF (AMLP) had a correlation of 0.59 with WTI over the same period.

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Correlation with natural gas prices

The above graph shows the movement of MEP, WTI, and natural gas prices over the last three years. MEP’s stock had a correlation of 0.22 with natural gas prices over the last year. This is higher compared to the correlation of 0.13 of AMLP with natural gas. MEP’s relatively higher correlation likely reflects its mainly natural gas–focused operations.

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