Market Overview

Citi On What High Oil Prices Mean For Stock Investors: 60% Correlation With Equities

Share:
Citi On What High Oil Prices Mean For Stock Investors: 60% Correlation With Equities
Related OIL
Here's The Difference Between ETFs And ETNs
Oil Stocks Gushing Higher On News Of OPEC Output Limit Deal
Weekly Oil Markets Recap - OPEC Puts Skeptics In Their Place (Seeking Alpha)
Related
Some Traders See Upside For These Oil ETFs
Election Opportunity With These Oil And Gas ETFs

Citi's Amir Amen commented on oil's impact on global equities and what it means for the future.

"Global equities have been tracking oil prices in the last 12-18 months… [which] makes sense given both asset classes are tied to global growth and are usually part of the same risk-off/ risk-on trade."

Related Link: Clarksons Platou Asks What, If Anything, Changes With Oil At $50?

60% Correlation

According to the analyst, recent correlation between global equities and oil prices has been a positive 60 percent, which was high compared to the historical average of 17 percent. "Perhaps this was due to oil's big influence on global earnings trends during this period," said Amen.

On the flipside, consumer oriented sector earnings, which are supposed to do well with falling oil prices, "never really came through" in terms of benefiting from lower oil prices said the analyst.

Posted-In: Amir Amen CitiAnalyst Color Commodities Markets Analyst Ratings

 

Related Articles (DWTI + GUSH)

View Comments and Join the Discussion!