Yahoo Finance How Do Gas-Weighted Stocks Correlate with Natural Gas?
Which Upstream Stocks Should You Consider as Oil Nears $50?
What’s the correlation?
Among upstream companies that are part of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) and operate with a production mix of at least 60% natural gas (UNG) (BOIL) (UGAZ), Range Resources (RRC) had the highest positive correlation with natural gas futures over the last month. Range Resources had a correlation of about 30.1% with natural gas futures between April 27 and May 27, 2016.
Upstream stocks Gulfport Energy (GPOR), Antero Resources (AR), Comstock Resources (CRK), and Southwestern Energy (SWN) had correlations of 18.8%, 15.7%, 10.4%, and 8.3%, respectively, with natural gas futures over the last month, as shown in the above table. Memorial Resource Development (MRD) and Rice Energy (RICE) had correlations of 5.9% and 1.6%, respectively, with natural gas futures in the last month.
Rex Energy (REXX) and Contango Oil & Gas (MCF) had correlations of -21.6% and -31.6%, respectively, with natural gas in the last month. Among XOP stocks that operate with production mixes of at least 60% natural gas, Rex Energy and Contango Oil & Gas Company had inverse correlations with natural gas futures.
Natural-gas-weighted stocks with high correlations with natural gas futures have tended to move with natural gas in the past. Stocks with low correlations with natural gas were not as impacted by natural gas price movements while those with inverse correlations have moved in the opposite direction as natural gas during the specified period.
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