In this part, we’ll analyze the correlation between Helmerich & Payne’s (HP) stock price and West Texas Intermediate (or WTI) crude oil’s price.
The correlation coefficient between HP’s and crude oil’s price measures the statistical relationship between the two variables. A correlation coefficient value of 0 to 1 shows a positive correlation, 0 states no correlation, and -1 to 0 shows an inverse correlation.
How correlated are Helmerich & Payne and crude oil prices?
The correlation coefficient between Helmerich & Payne’s stock price and crude oil prices from September 2015 to the present is 0.66. This indicates a relatively strong positive relationship between crude oil prices and Helmerich & Payne’s stock.
Correlation between HP’s stock price and crude oil
As noted in the table above, Helmerich & Payne’s correlation coefficient with crude oil price has decreased since the end of fiscal 3Q16 until September 9 compared to the past year. In comparison, the VanEck Vectors Oil Services ETF’s (OIH) correlation with crude oil has increased since July 1 versus the correlation coefficient since a year ago. Precision Drilling Corporation’s (PDS) correlation coefficient since July 1 is higher than HP’s.
In the final part of this series, we’ll discuss Helmerich & Payne’s returns versus the industry indicators.