Southwestern Energy’s stock performance

As we saw in the previous part of this series, Southwestern Energy’s (SWN) stock price decreased strongly by ~6.0% for the week ended January 19. Natural gas (UGAZ)(DGAZ)(UNG) prices fell marginally by ~0.5%. So it’s clear that SWN’s stock price followed natural gas prices to the downside last week. In this part of our series, we’ll try to understand this correlation between SWN’s stock and natural gas prices.

Is Southwestern Energy Following Natural Gas Price Movements?

Southwestern Energy’s stock price correlations

For the week ended January 19, Southwestern Energy’s stock had shown a high correlation of ~53% with natural gas (UGAZ)(DGAZ). In other words, volatility in natural gas prices impacted SWN’s stock price on most of the days last week, which is also in line with SWN’s production mix that contains almost ~90% natural gas.

For the week ended January 19, Southwestern Energy’s correlation with crude oil (SCO)(USO) and the SPDR S&P 500 ETF (SPY) was ~82% and ~-12%. This correlation means movements in SWN’s stock price were in sync with crude oil (UCO) price movements but indifferent to price changes in the SPDR S&P 500 ETF (SPY).

Southwestern Energy’s correlations over the last month

Southwestern Energy’s stock has shown correlations of ~-4%, ~1%, and ~-28% with natural gas (BOIL), crude oil (UCO), and SPDR S&P 500 ETF (SPY) prices, respectively, over the last month. To learn more about why SWN’s stock price is diverging from natural gas prices, see Part 1 of this series.

For more on natural gas–weighted stocks, see Market Realist’s series These Gas-Weighted Stocks Could Ignite after EIA Inventory Data.

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