ConocoPhillips stock’s correlations last week
As we saw in the previous part, ConocoPhillips (COP) stock fell sharply by 5.4% last week. Crude oil and natural gas fell 0.05% and 3.6%, respectively, in the same week. The SPDR S&P 500 ETF (SPY) was down by 0.09%. In this part, we’ll look at the relationship between the daily movements of COP’s stock price and crude oil prices by studying COP stock’s correlation coefficient with crude oil over the last one week and last one month. We’ll also look at the extent to which COP’s stock price followed daily natural gas prices and the S&P 500 Index over these same timeframes.
For the week ending November 17, ConocoPhillips (COP) stock had shown the highest correlation of ~91% with natural gas (UNG). This means that movements in natural gas had a very high influence on COP’s stock. COP stock’s correlation with crude oil (USO) (USL) stood at ~46%, meaning movements in COP’s stocks were also in tandem with the crude oil last week.
In comparison to natural gas and crude oil, COP stock’s correlation with the SPDR S&P 500 ETF (SPY) was much lower at ~24%. This means that movements in SPY had a small influence on COP’s stock last week. COP’s stock has shown correlations of 66%, 42%, and 67% with crude oil (USO), natural gas (UNG), and the SPDR S&P 500 ETF (SPY) prices, respectively, over the last one month.
COP’s peer Occidental Petroleum (OXY) had shown a correlation of ~91% with crude oil prices last week and rose 0.34% due to the marginal increase in crude prices. OXY had shown a correlation of ~51% and ~52% with natural gas and the SPDR S&P 500 ETF (SPY) last week. Occidental Petroleum’s production mix contains ~69% crude oil, and thus OXY has a high correlation with crude oil prices.
To know more about the correlation of various upstream stocks with various energy commodities, read Market Realist’s series on Which Energy Stocks Could Be in Danger if Oil Keeps Stalling?