ConocoPhillips’s stock performance
As we saw in the previous part of this series, ConocoPhillips’s (COP) stock price was up by 3.70% for the week ended June 22. Crude oil (SCO) rose strongly by 5.41%. So, COP’s stock price underperformed crude oil prices. In this part, we’ll quantify the correlation between COP stock and crude oil prices.
ConocoPhillips’s stock price correlations
For the week ended June 22, ConocoPhillips’s stock price had a correlation of ~63% 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 Energen (EGN), Marathon Oil (MRO), and Occidental Petroleum (OXY) had correlations of 91%, 73%, and 37%, respectively, with crude oil.
For the week ended June 22, ConocoPhillips’s correlation with natural gas was at -11%, which means movements in COP’s stock price were slightly inverse with movements in natural gas prices.
ConocoPhillips’s correlations over the last month
ConocoPhillips’s stock had correlations of 22% and -19% with crude oil and natural gas prices, respectively, over the last month. These correlations are in line with COP’s 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.
For more on energy stocks and their correlations with crude oil prices, see Market Realist’s series Is Your Energy Portfolio Ignoring Steady Oil Prices?