Nabors Industries’s Correlation with Crude Oil on April 19
In this part, we’ll analyze the correlation between Nabors Industries’s (NBR) stock price and West Texas Intermediate (or WTI) crude oil’s price. The correlation coefficient between NBR’s stock price and crude oil’s price 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.
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NBR’s correlation with crude oil price
The correlation coefficient between Nabors Industries’s (NBR) stock price and crude oil prices from April 19, 2016, to April 19, 2017, is 0.62. This indicates a relatively strong positive relationship between crude oil prices and Nabors Industries stock.
Correlation between NBR’s peers and crude oil
Since April 2016, the correlation coefficient between the S&P 500 Index (SPX-INDEX) and Nabors Industries is 0.39. NBR is a constituent of the VanEck Vectors Oil Services ETF (OIH), which is an ETF that tracks 25 OFS companies.
In the final part of this series, we’ll discuss Wall Street analysts’ recommendations for NBR.