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A Look at Helmerich & Payne’s Correlation with Crude Oil

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Jul. 19 2016, Updated 11:07 a.m. ET

Correlation coefficient

In this part, we’ll analyze the correlation between Helmerich & Payne’s (HP) stock price and the price of WTI (West Texas Intermediate) crude oil. The correlation coefficient measures the statistical relationship between the two variables. A correlation coefficient value of 0–1 shows a positive correlation. Zero states no correlation, and -1–0 shows an inverse correlation.

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How co-related are Helmerich & Payne and crude oil?

The correlation coefficient between Helmerich & Payne’s stock price and crude oil prices from July 2015 to the present is 0.67. This indicates a relatively strong positive relationship between crude oil prices and Helmerich & Payne stock.

Correlation between HP stock and crude oil

As you can see in the above table, HP’s correlation with the price of crude oil has decreased since the end of fiscal 1Q16 until July 14 compared to the past year. The correlation of the VanEck Vectors Oil Services ETF (OIH) with crude oil has remained unchanged since April 1 compared to the correlation coefficient since July 2015.

Flotek Industries’ (FTK) correlation coefficient since April 1 is lower than HP’s. Helmerich & Payne is 4.3% of the iShares US Oil Equipment & Services ETF (IEZ).

Next, we’ll look at Wall Street analysts’ recommendations for HP.

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