Correlation with WTI crude oil
- Chesapeake Energy (CHK): 71.4%
- WPX Energy (WPX): 70.1%
- Southwestern Energy Company (SWN): 38.8%
- EQT Corp (EQT): 37.1%
- Cabot Oil & Gas (COG): 33.3%
CHK has had a negative correlation with natural gas prices in the past five trading sessions as discussed in the previous part. Moreover, CHK and WPX were in the red compared to a 1.1% rise in natural gas prices in the last five trading sessions. Notably, US crude oil active futures fell 1% over this time period. In the next part, we’ll analyze the returns of all these natural-gas-weighted stocks.
All of these natural-gas-weighted stocks are from the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) and have a minimum production mix of 60% in natural gas.
Natural-gas-weighted stocks that may be least affected by US crude oil’s movements based on their correlations with oil in the trailing week are:
- Range Resources (RRC): 8.7%
- Antero Resources (AR): 0.6%
RRC had the highest correlation with natural gas prices over this time period.
Often, crude oil can drive movements in the entire energy sector including natural gas prices. Because of this, some natural-gas-weighted stocks can show a higher correlation with oil compared to natural gas prices.