How Schlumberger Reacted to Crude Oil Prices on September 22
Correlation between Schlumberger and crude oil
Schlumberger’s (SLB) stock price correlation coefficient with crude oil from September 15, 2017, to September 22, 2017, is 0.30. It shows that Schlumberger and crude oil prices have been moderately correlated in the past week. Schlumberger’s correlation with the Dow Jones Industrial Average (DJIA-INDEX) from September 15, 2017, to September 22, 2017, was -0.34.
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What does SLB’s correlation with crude oil mean?
Since June 30, 2017, the price of WTI (West Texas Intermediate) crude oil has risen 8.0%. That followed crude oil’s considerable fall over the previous four months. However, analysts don’t expect a significant impending downside in crude oil prices in the near term. So a moderate correlation may not be helpful to support any likely rise in SLB stock. Schlumberger’s correlation with the price of crude oil has fallen sharply in the trailing year to September 22, 2017, versus the previous year to September 22, 2016.
Correlation between SLB’s peers and crude oil
The VanEck Vectors Oil Services ETF’s (OIH) correlation with crude oil since September 15, 2017, is 0.53. OIH’s correlation with crude oil has fallen significantly in the trailing year to September 22, 2017, versus the previous year. Flotek Industries’ (FTK) correlation coefficient since September 15, 2017, is 0.21. Halliburton’s (HAL) correlation coefficient since September 15, 2017, is 0.57, and Tidewater’s (TDW) is 0.08 for the same period.
A high correlation means the stock was impacted more by movements in crude oil. A negative correlation, on the other hand, means that the stock frequently moved in the opposite direction of crude oil.
You can find out more about the oilfield services and equipment industry in Market Realist’s The Oilfield Equipment and Services Industry: A Primer.