ConocoPhillips stock performance
As we saw in Part 1 of this series, ConocoPhillips (COP) stock rose 4% in the week ended June 1. However, crude oil (SCO) fell 3% in the same week. So it’s clear that COP stock outperformed crude oil.
In this part, we’ll quantify the correlation between COP stock and crude oil prices.
ConocoPhillips stock price correlations
For the week ended June 1, ConocoPhillips stock had a correlation of ~5% with crude oil prices. In other words, movement in crude oil prices failed to impact COP stock on most of the days last week. Other oil-weighted stocks, Devon Energy (DVN), Occidental Petroleum (OXY), and Marathon Oil (MRO), had correlations of 62%, -16%, and 15%, respectively, with crude oil last week.
For the week ended June 1, ConocoPhillips’s correlation with natural gas was 34%. That means movements in COP stock were moderately affected by movements in natural gas prices.
ConocoPhillips’s correlations over the last month
ConocoPhillips stock has shown correlations of 73% and 17% 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 Q1 2018 production mix contained 61% and 63% liquids (crude oil, bitumen, and natural gas liquids), respectively.
To read more on various energy stocks and their correlations with crude oil prices, refer to Market Realist’s series Are Oil-Weighted Stocks a Good Bet during Oil’s Rise?