How the Broader Market Is Affecting Energy ETFs



Energy ETFs

The Alerian MLP ETF (AMLP), Energy Select Sector SPDR ETF (XLE), and VanEck Vectors Oil Services ETF (OIH) had negative correlations of 32.7%, 46.9%, and 25.2%, respectively, with US crude oil active futures between August 10 and 17, 2017. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) had a positive correlation of 37.4%.

The ETFs’ performance was as follows:

  • OIH fell 4.8%
  • XOP fell 4.2%
  • AMLP fell 3.8%
  • XLE fell 3.7%

US crude oil active futures fell 3.1%.

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Natural gas

XLE, XOP, and OIH had negative correlations of 61.4%, 8.9%, and 0.5%, respectively, with natural gas active futures between August 10 and 17, 2017. AMLP had a positive correlation of 27.7% with natural gas futures.

The S&P 500

XLE, OIH, XOP, and AMLP had respective correlations of 85.6%, 60.4%, 31.4%, and 3.9% with the S&P 500 (SPY) in the seven calendar days ended August 17, 2017. Based on the correlations, in the trailing week, the movement in the S&P 500 was more important to energy ETFs than oil prices. However, investors should also track oil prices as they can affect the entire energy sector. To know more about the energy sector, read Everything You’d Better Know about Upstream Energy Companies.


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