In this part, we’ll analyze the correlation between Core Laboratories’ (CLB) stock price and the price of WTI (West Texas Intermediate) crude oil. The correlation coefficient between CLB’s and crude oil’s price measures the statistical relationship between the two variables. A correlation coefficient value between 0 and 1 shows a positive correlation, whereas a value of 0 states no correlation, and a value between -1 and 0 shows an inverse correlation.
How correlated are Core Laboratories’ and crude oil prices?
The correlation coefficient between Core Laboratories’ stock price and crude oil prices from June 2015 to the present is 0.56. This indicates a relatively strong positive relationship between crude oil prices and Core Laboratories’ stock.
As noted in the table above, Core Laboratories’ correlation coefficient with the price of crude oil has increased since the end of 1Q16 until June 21 as compared to the past year.
By comparison, the VanEck Vectors Oil Services ETF’s (OIH) correlation with crude oil has decreased since March 31, as compared to its correlation coefficient since June 2015. Schlumberger’s (SLB) correlation coefficient since March 31 is higher than CLB’s.
Next, we’ll discuss Core Laboratories’ returns versus the industry indicators.