uploads///COP WU Correlation

What Really Moved ConocoPhillips Stock Last Week?


Nov. 20 2020, Updated 3:57 p.m. ET

ConocoPhillips’s correlations last week

As we have discussed in the previous part, ConocoPhillips’s (COP) stock price rose 1.7% last week. Crude oil and the SPDR S&P 500 ETF (SPY) rose 0.76% and 0.85%, respectively, in the same week. However, natural gas prices fell nearly 3%. In this part, we’ll discuss the relationship between the daily movements in ConocoPhillips’s stock price and crude oil prices. We’ll study the correlation coefficient between ConocoPhillips stock and crude oil in the past week and the past month. We’ll also look at the extent to which ConocoPhillips’s stock price followed daily natural gas prices and the S&P 500 Index during these periods.

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For the week ending October 20, ConocoPhillips stock showed a negative correlation of -15% with crude oil (USO) (SCO). It means that in aggregate daily movements, crude oil didn’t influence ConocoPhillips’s stock price in the last five days. Even though crude oil prices rose in the first three days of the week, ConocoPhillips’s stock price was stagnant at ~$49.72. ConocoPhillips’s indifference to crude oil prices continued on Thursday when crude oil prices fell more than 1%. ConocoPhillips stock was almost flat. However, most of the gains in ConocoPhillips came on Friday when crude oil prices reversed strongly and rose 0.64%.

In contrast to crude oil, ConocoPhillips’s correlations with natural gas (UNG) and SPY were better at 8% and 96%, respectively, during the same period. It means that movements in ConocoPhillips stock were in tandem with the S&P 500 Index last week.

ConocoPhillips stock has shown correlations of 66%, -26%, and 18% with crude oil (USO), natural gas (UNG) (BOIL), and SPY prices, respectively, in the past month.

ConocoPhillips’s peers

ConocoPhillips’s peer, Occidental Petroleum (OXY) had a correlation of -39% with crude oil prices last week. It rose more than one percentage point due to the rise in crude prices. Most of the gains in Occidental Petroleum came on Friday when crude oil prices rose 0.64%. In the first three days of last week, Occidental Petroleum’s stock price consolidated with a slight negative bias at ~$64.73 despite higher crude oil prices. Even though the weekly gains in Occidental Petroleum could be attributed to the rise in crude oil prices, its correlation with crude oil in the last five days came in with the negative value.

Occidental Petroleum had a correlation of 3% and 94% with natural gas and SPY last week. Occidental Petroleum’s production mix contains ~75% crude oil. As a result, crude oil prices influence Occidental Petroleum’s stock price.

To learn more about various upstream stocks’ correlations with energy commodities, read Why a Rise in Oil Is Necessary for an Upside in Energy Stocks.


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