A Look at the Bottom 5 Oilfield Stocks’ Correlation with Crude
Patterson-UTI Energy’s correlation with crude oil
Previously, we identified the bottom five OFS (oilfield service) stocks according to expected earnings growth in 3Q17. The correlation coefficient between Patterson-UTI Energy (PTEN) stock’s and crude oil’s prices from September 18, 2016, to September 18, 2017, was 0.65, which indicates a strong positive relationship.
PTEN’s correlation with crude oil strengthened between the year ended September 2017 and the year prior. PTEN’s correlation coefficient with the Dow Jones Industrial Average (DJIA-INDEX) since September 2016 has been 0.24.
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WFT’s, CLB’s, and NBR’s correlation with crude oil
The VanEck Vectors Oil Services ETF’s (OIH) correlation with crude oil has been 0.71 since September 2016, and Weatherford International’s (WFT) has been 0.44. WFT’s correlation with crude oil was weaker in the year ended September 2017 than in the previous year.
On the other hand, Nabors Industries’ (NBR) correlation with crude oil became stronger, rising to 0.66. Core Laboratories’ (CLB) correlation coefficient with crude oil was 0.48 and TechnipFMC’s (FTI) correlation is not available. For more on the OFS industry, read The Oilfield Equipment and Services Industry: A Primer.