The Oil Crisis
Presented by:
Max Snitkovsky
Chris Zientek
March 18th, 2009
Hypothesis
• H0: β1≈ β2
– Where β1= Correlation of oil prices and DJIA between 1986-present
– Where β2= Correlation of oil prices and DJIA between January 2007- July 2008
• The correlation between oil prices and stock market prices during incline of the oil spike are similar to the historical correlation
β=-.05R Squared= .002
Gulf War
Oil Oversupply
Southwest Hedging
• 2007 was 95% hedged at $50/barrel
• 2008 was 65% hedged at $49/barrel
• 2009 is over 50% hedged at $51/barrel
• 2010 is over 25% hedged at $63/barrel
• 2011 is over 15% hedged at $64/barrel
• 2012 is 15% hedged at $63/barrel
Percentage Price Changes
1986 - present
β= -.013R Squared= .0006
β=.044R Squared= .0039
Questions?
Top Related