In this part, we’ll compare Apache’s (APA) recent stock movement with movement in the broader market, the energy industry, crude oil prices, and natural gas prices. As we saw earlier in this series, Apache’s stock has risen almost 6.4% YoY (year-over-year).
Recent trends in Apache’s stock
In the graph above, we can see that Apache stock has been mirroring crude oil. The correlation coefficient between the price of Apache stock and WTI (West Texas Intermediate) (USO) since April 2016 has been ~0.63, indicating a strong positive correlation. The correlation coefficient between the price of Apache stock and natural gas (UNG) since April 2016 has been ~0.09, indicating a positive but much lower correlation.
The above graph shows that Apache stock has produced lower returns than WTI on a YoY basis. In fact, when compared with the S&P 500 ETF (SPY) and the Energy Select Sector SPDR ETF (XLE) Apache has also underperformed. SPY has returned 14% since April 2016, while XLE has returned 14.8%. The energy sector makes up ~7% of SPY, and Apache makes up 1.9% of the Energy Select Sector SPDR ETF (XLE). In the next part of our series, we’ll explore how Apache’s implied volatility has evolved.