Unraveling the Crude Oil Correlations of Four Large Oilfield Services Players



Correlation coefficient

In this part, we’ll analyze the correlation between stock prices of Schlumberger (SLB), Halliburton (HAL), Baker Hughes (BHI), and FMC Technologies (FTI) and the WTI (West Texas Intermediate) crude oil price. The correlation coefficient between these stocks and the price of crude oil measures the statistical relationship between the two variables. Remember, a correlation coefficient value of 0 to 1 shows a positive correlation, 0 states no correlation, and -1 to 0 shows an inverse correlation.

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Halliburton’s correlation with crude oil

As we can see in the table above, the correlation coefficient between Halliburton’s stock price and crude oil prices from November 4, 2015, to November 4, 2016, is the highest in our group of four major peers. 

Since October 1, Halliburton’s correlation coefficient has risen YoY (year-over-year).

Correlation between SLB’s, BHI’s, and FTI’s stock prices and crude oil

The correlation coefficient between Schlumberger’s stock price and crude oil prices since October 1 has fallen YoY. The correlation coefficient between Baker Hughes’s stock price and crude oil prices since October 1 has also fallen YoY, and FMC Technologies’ correlation with crude oil prices has fallen since October 1.

By comparison, the VanEck Vectors Oil Services ETF’s (OIH) correlation coefficient with crude oil prices has risen YoY as of October 1, 2016.

In the next part, we’ll look at short interests of our four major OFS mid-cap stocks.


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