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How the Market Viewed Weatherford International on May 12

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Part 3
How the Market Viewed Weatherford International on May 12 PART 3 OF 4

Weatherford International’s Correlation with Crude Oil on May 12

Correlation coefficient

In this part, we’ll analyze the correlation between Weatherford International’s (WFT) stock price and West Texas Intermediate (or WTI) crude oil’s price. The correlation coefficient between the 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.

Weatherford International’s Correlation with Crude Oil on May 12

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Weatherford’s correlation with crude oil price

The correlation coefficient between Weatherford International’s stock price and crude oil prices from May 12, 2016, to May 12, 2017, was 0.47. This indicates a relatively steady positive relationship between crude oil prices and Weatherford International stock.

Correlation between OFS stocks and crude oil

As noted in the graph above, the VanEck Vectors Oil Services ETF’s (OIH) correlation with crude oil since May 2016 is 0.72. OIH is an ETF tracking index of 25 OFS companies.

Oil States International’s (OIS) correlation coefficient with crude oil since May 2016 is 0.58, while Tidewater’s (TDW) correlation coefficient since May 2016 is 0.31. McDermott International’s (MDR) correlation coefficient since May 2016 is 0.52.

You can read a comparative analysis of the largest oilfield services companies in Market Realist’s Which Oilfield Service Giant Stands Tallest after 1Q17?

In the final part of this series, we’ll discuss investors’ short interest in WFT.

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