ConocoPhillips’s stock performance
As we discussed in the preceding part of this series, ConocoPhillips’s (COP) stock price rose more than 4% in the week ended February 23. Crude oil (USL) (SCO) (DWT) and natural gas prices each rose ~3%, and so it’s clear that COP’s stock price followed the rise in crude oil and natural gas last week.
In this part of our series, we’ll try to quantify this correlation between COP stock and crude oil and natural gas prices.
ConocoPhillips’s stock price correlations
In the week ended February 23, ConocoPhillips’s stock price showed a high correlation of ~90% with crude oil prices. In other words, movement in crude oil prices impacted COP’s stock price on most of the days last week.
This is in-line with COP’s production mix, which contains almost ~62% liquids (crude oil, bitumen, and natural gas liquids). Since 2017, COP’s operational strategy has been geared toward reducing natural gas production in North America.
For the week ended February 23, ConocoPhillips’s correlation with natural gas was around -21%. This means that movements in COP’s stock price were not in sync with natural gas prices.
ConocoPhillips’s correlations over the past month
ConocoPhillips stock has shown correlations of ~93% and ~86% with crude oil and natural gas prices, respectively, over the past month.
For more on various energy ETFs and their correlations with crude oil prices, check out Market Realist’s series Is the Rebound in Oil Prices Increasing Energy ETFs’ Returns?
Continue to the next part of this series for a look at COP’s implied volatility and price range forecast for the next week.