ConocoPhillips’s stock performance
As we saw in the previous part of this series, ConocoPhillips’s (COP) stock price was down ~6%. Crude oil (SCO) fell more than 1%. So, it’s clear that COP’s stock price underperformed crude oil prices. In this part, we’ll quantify this correlation between COP and crude oil prices.
ConocoPhillips’s stock price correlations
For the week, ConocoPhillips’s stock price showed a correlation of ~66% with crude oil prices. In other words, movements in crude oil prices affected COP’s stock price most days last week. Other oil-weighted stocks Devon Energy (DVN), Occidental Petroleum (OXY), and Marathon Oil (MRO) showed correlations of ~81%, ~36%, and ~82% respectively, with crude oil.
ConocoPhillips’s correlation with natural gas was around -93%, which means movements in COP’s stock price weren’t in sync with movements in natural gas prices.
ConocoPhillips’s correlations over the last month
ConocoPhillips’s stock has shown correlations of ~49% and ~-50% with crude oil and natural gas prices, respectively, over the last month. These correlations are in line with COP’s current operational strategy, which is geared toward lowering natural gas production in North America.
ConocoPhillips’s 2017 and 1Q18 production mix contained ~61% and ~63% liquids (crude oil, bitumen, and natural gas liquids) respectively.
For more on energy stocks and ETFs and their correlation with crude oil prices, see Market Realist’s series on Is Your Energy Portfolio Ignoring Steady Oil Prices?