On November 2–9, 2017, the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) had the highest correlation of 94.4% with US crude oil active futures on our list of energy subsector ETFs. During this period, XOP rose 4.9%—the second-largest gainer among energy subsector ETFs. The rise in XOP was 10 basis points more than the rise in US crude oil futures during this period.
The Energy Select Sector SPDR ETF (XLE) and the VanEck Vectors Oil Services ETF (OIH) had correlations of 88.8% and 88.3% with US crude oil active futures in the trailing week. We already discussed XLE’s performance in the previous part of this series. OIH rose 6.1%—the largest on our list of major energy subsector ETFs. AMLP had a correlation of 63.1% with US crude oil active futures in the past five trading sessions. It fell 0.5% in the trailing week.
OIH, XLE, XOP, and AMLP had correlations of 99.5%, 96.7%, 87.9%, and 62% with natural gas futures in the seven calendar days to November 9, 2017, respectively. In fact, natural gas prices rose 9% during this period. Notably, AMLP also had the lowest correlation with US crude oil prices.
S&P 500 Index
In the past five trading sessions, AMLP, OIH, XLE, and XOP had correlations of 61.7%, 23.6%, 10.4%, and 1.7% with the S&P 500 Index (SPY), respectively. The S&P 500 Index rose 0.2% during this period.
Based on the correlations, the gain in oil and natural gas prices could be a key catalyst for most of these ETFs.