Has HAL’s Correlation with Crude Oil Risen since 1Q16?



Correlation coefficient

In this part, we’ll analyze the correlation between Halliburton’s (HAL) stock price and the West Texas Intermediate (or WTI) crude oil price. The correlation coefficient between HAL and crude oil measures the statistical relationship between the two variables. A correlation coefficient value of zero to one shows a positive correlation. A correlation of zero states no correlation while -1 to zero shows an inverse correlation.

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What’s the correlation between Halliburton and crude oil prices?

The correlation coefficient between Halliburton’s stock price and crude oil prices from July 2015 to the present is 0.64. This indicates a relatively strong positive relationship between crude oil prices and Halliburton’s stock.

Correlation between HAL’s stock and crude oil

As noted in the table above, HAL’s correlation with the crude oil price has increased since the end of 1Q16 until July 5 compared to the past one year. The VanEck Vectors Oil Services ETF’s (OIH) correlation with crude oil has remained unchanged since April 1 in comparison to the correlation coefficient since July 2015. Precision Drilling’s (PDS) correlation coefficient since April 1 is lower than HAL’s. HAL makes up 0.15% of the WisdomTree Total Dividend ETF (DTD). The energy sector makes up 10.1% of DTD.

Next, we’ll discuss Wall Street analysts’ recommendations for SLB.


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