The 12-month correlation between U.S. equities and West Texas Intermediate crude has crept higher in 2019. Since 2009, equities, as measured by the Russell 3000 index, have performed better in periods when their correlations to crude was relatively weak. Lower correlations have been associated more with double-digit 12-month returns than higher correlations with few periods when the relationship is negative.
Oil has surged in 2019, and despite its recent slide, a barrel of WTI is up about 36% during the year while the broad market U.S. equity index has gained 16%. Through April, the correlation between crude and equities has been near one-for-one at about 0.98.