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Analyzing Wall Street's Forecast for Weatherford International

PART:
1 2 3 4 5
Part 4
Analyzing Wall Street's Forecast for Weatherford International PART 4 OF 5

What’s Weatherford’s Correlation with Crude Oil?

Correlation coefficient

In this part, we’ll analyze the correlation between Weatherford International’s (WFT) stock prices and WTI (West Texas Intermediate) crude oil prices. The correlation coefficient between the stock prices and crude oil prices measures the statistical relationship between the two variables. A correlation coefficient value of 0 to 1 shows a positive correlation, 0 states no correlation, and -1 to 0 shows an inverse correlation.

Weatherford’s correlation with crude oil prices

The correlation coefficient between Weatherford International’s stock price and crude oil prices from March 2016 to March 2017 is 0.43. It indicates a relatively steady positive relationship between crude oil prices and Weatherford stock.

What’s Weatherford’s Correlation with Crude Oil?

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Correlation between OFS stocks and crude oil

As noted in the above graph, the VanEck Vectors Oil Services ETF’s (OIH) correlation with crude oil since March 2016 is 0.71. OIH is an ETF tracking index of 25 OFS companies. Since March 2016, Tidewater’s (TDW) correlation coefficient with crude oil since March 2016 is 0.34, while Precision Drilling’s (PDS) correlation coefficient since March 2016 is 0.63. Core Laboratories’ (CLB) correlation coefficient since March 2016 is 0.57.

Next, we’ll discuss Wall Street analysts’ recommendations for Weatherford.

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