The correlation coefficient between Weatherford International’s (WFT) stock price and the price of crude oil 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 WFT and crude oil prices?
The correlation coefficient between Weatherford International’s stock price and crude oil prices from November 2015 to November 7, 2016, is 0.54. This indicates a relatively strong positive relationship between crude oil prices and Weatherford International’s stock.
Weatherford International’s correlation coefficient with the price of crude oil has increased since October 1 until November 7, as compared to the correlation coefficient one year ago. By comparison, the VanEck Vectors Oil Services ETF’s (OIH) correlation with crude oil has also risen since October 1, as compared to the correlation coefficient one year ago. By comparison, National Oilwell Varco’s (NOV) correlation coefficient since October 1 is lower than WFT’s.
In the next and final part, we’ll compare Weatherford International’s returns with industry indicators.