Extra Credit Assignment
Please Google S&P 500 companies and pick an energy
company. This company can be operating at any level of the energy industry
(exploration, storage, retail, etc.). Please write (do not plagiarize) about
half a page (minimum) of overview about this company. This information should
include (but not limited to) things like, how long it has been in business,
what kind of a business is this, what kind of revenue streams does it use, what
are its strengths and weaknesses, who are its competitors, etc. For this part
of the assignment or any other part below, please understand you are expected
to do your own research. If information seems limited in this document, that is
on purpose. I would like you to navigate through some of these websites and
find the information you need on your own.
In addition, write another 1 page (minimum) worth of
information analyzing the following information:
Has there been any relationship (or correlation)
between oil prices and this company’s stock price performance in the last one
year as well as last 5 years (you can go to Yahoo Finance to find historical daily
stock price information. For example, you can search for XOM in the search box
on the top and then click on the historical data tab). If you want (don’t have
to), you can create two charts for the same timeframe (one for oil price and
the other for the stock price) and talk about the similarities and differences.
You can go to eia.gov for oil prices and other energy commodities.
How has the stock been performing (in the last year as
well as last 5 years) in respect to the stock market in general? You can look
at Yahoo Finance and search for S&P 500 index (^GSPC). This is a good proxy for the general performance of
the market. You can compare the performance of the stock and the S&P 500
index. Since there can be a scaling issue with large vs. small prices, the best
way to compare these to is to calculate the “returns” and compare those returns
(instead of just prices). The returns are daily HPR (holding period returns).
This can be easily done by downloading the daily prices from Yahoo Finance and
calculating daily returns in Excel (HPR is calculated as (new-old)/old). So if
you are calculating today’s HPR (from yesterday’s to today’s prices), you would
use today’s price as “new” and yesterday’s price as “old”. If you repeat this
for every day, you will have the “returns” calculated for every day.
How has the stock been
performing against its two top competitors? Again, doing this as returns (as
mentioned in the previous paragraph) is the best route because you might have a
stock with a price of $200 vs a stock with a price of $30 – these price
movements are not comparable unless you look at returns.
This assignment should
have at least 700 words and should be in font size 12 (font type doesn’t
matter).Please make sure your approach, delivery and writing is at the level
of a graduate student.
