ConocoPhillips’s stock performance
As we saw in the previous part of this series, ConocoPhillips’s (COP) stock price has fallen significantly, more than 5% for the week ended March 2. Crude oil (UWT)(SCO)(DWT) fell ~4%. So, it’s clear that COP’s stock price followed the decline in crude oil prices last week. In this part of our series, we’ll try to quantify this correlation between COP’s stock and crude oil prices.
ConocoPhillips’s stock price correlations
For the week ended March 2, ConocoPhillips’s stock price had shown a high correlation of ~98% with crude oil prices. In other words, movements in crude oil prices impacted COP’s stock price most days last week. From Tuesday to Thursday, crude oil and COP’s stock price both fell sharply.
This price correlation is also in line with COP’s production mix, which contains almost ~62% crude oil, bitumen, and natural gas liquids. Also, COP’s current operational strategy is geared toward reducing natural gas production in North America.
For the week ended March 2, ConocoPhillips’s correlation with natural gas was at around -6%, which means movements in COP’s stock price weren’t in synch with natural gas prices.
ConocoPhillips’s correlations over the last month
ConocoPhillips’s stock has shown correlations of ~77% and ~69% with crude oil and natural gas prices, respectively, over the last month. To learn more about energy stocks and their correlation with crude oil prices, see Market Realist’s series Oil Fell: Are Energy Stocks at Risk?