BP daily return correlation: Brent crude vs S&P 500 (3‑year window)
Over the past three years, BP has traded like a crude-oil company wearing an oil-major costume. Its daily returns line up with Brent at roughly 0.50 correlation, versus only 0.25 with the S&P 500. That gap — about a quarter of a point — is the entire thesis in one number: for BP, the price of the barrel matters more than the direction of the broad market.
The question mattered because BP is often treated as a diversified energy giant. But its upstream-heavy portfolio means the oil price should drive daily swings, with market beta a secondary force. Is that true in the data, or just in theory? The full analysis below walks through the correlations, the rolling relationship, and the caveats that come with cross-market comparisons.
For BP over the past ~3 years, does its daily return correlate more strongly with Brent crude returns than with SPY returns? Thesis: BP is a crude proxy, so Brent correlation dominates market beta because its upstream-heavy portfolio makes oil the primary driver.
How this was measured
Resampled BP and SPY minute bars to daily close and computed simple percent‑change returns. Used the global brent_daily_df for daily Brent front‑month settlement prices, likewise converted to daily returns. Aligned all three series on the intersection of non‑missing dates. Pearson and Spearman rank correlations were computed between BP returns and each of Brent and SPY returns. A 60‑day rolling Pearson correlation between BP and each driver illustrates the time‑varying nature of the relationship. The key question is whether the BP‑Brent correlation exceeds BP‑SPY — a gap above 0.10 is taken as evidence that Brent dominates market beta for BP.
The key numbers
Reading the numbers
BP moved with Brent about twice as strongly as with SPY (0.50 vs 0.25 correlation), and the gap was big enough to say oil, not the stock market, is BP's main daily driver over the past ~3 years.
The charts
This rolling 60-day correlation line stays mostly higher for BP-Brent than for BP-SPY, with averages of about 0.49 and 0.19. The detail to notice is the end of the period: BP-Brent rises to around 0.67 while BP-SPY actually falls to about -0.21, so the oil link strengthened just as the market link faded. That widening gap supports the thesis that BP behaves more like a crude-oil trade than a broad market stock.
The bar for BP-Brent is about twice as tall as the bar for BP-SPY, 0.498 versus 0.252. In everyday terms, on a typical day about half of the shared movement between BP and Brent matches, while BP and SPY share only about a quarter. Because the difference is 0.246, well above the 0.1 threshold, this static view agrees with the rolling picture: Brent correlation dominates market beta for BP.
Correlation summary
| Pair | Pearson r | p‑value | Spearman ρ | ρ p‑value |
|---|---|---|---|---|
| BP‑Brent | 0.4981 | 0 | 0.5038 | 0 |
| BP‑SPY | 0.2518 | 0 | 0.0908 | 0.01621 |
The takeaway
Yes — over the past three years, BP behaves far more like a crude-oil play than a broad market stock. Across 700 overlapping trading days, the daily-return correlation with Brent was about 0.50, roughly double the 0.25 correlation with SPY, leaving a gap of almost 0.25 in Brent's favor. The rank-based Spearman result is even more lopsided: 0.50 for BP–Brent versus just 0.09 for BP–SPY, so the oil link isn't being carried by a few outlier days. With p-values effectively zero on both correlations and a sample of roughly 700 days, this is a real, stable relationship, not a coin flip or a fluke. The main caveats are that same-calendar-day alignment isn't perfect because Brent settles at a different time than U.S. equity close, and correlation doesn't prove causation — macro shocks can move oil and BP together. Still, the gap is so consistent that the thesis is supported: oil is the primary daily driver of BP, with market beta a secondary factor.
The fine print
- Brent settles at a different time than U.S. equity close, so same-day alignment can slightly dampen the correlations.
- Correlation isn't causation: dollar moves or global demand shocks can drive oil and BP together.
- The 60-day rolling window is one choice; shorter or longer windows could show a somewhat different gap.
- 700 days is decent but covers one regime; BP's upstream mix and oil sensitivity can shift over time.