What Really Moves Energy Stocks? By Howard Simons About this article: The question "What really moves energy stocks?" invites a response along the lines of, "Energy, ya big dummy!" But let's eschew such inelegance and see whether the answer really is that simple. And, while we are at it, let's take another look whether commodity-linked equities are an effective way of trading the underlying commodity. Factor Contributions First, let's go back to a factor analysis first introduced in February 2005. The relative performance of S&P 500 (SPX) industry groups can be regressed against a set of primal market factors. The statistically significant (90% confidence level) betas of the five oil-related groups within the S&P 500 against a set of 12 different market variables are presented below. Primal Market Factors' Contribution To Energy Industry Groups Click here for larger image. Source: Bloomberg Betas against two-year note yields and the VIX are negative;... Or, call us at 1-866-321-TSCM (8726) Monday-Friday, 8 a.m.-6 p.m. ET. Outside the U.S. and in Canada, call 1-212-321-5200.

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