How Does Halliburton Correlate with Crude Oil?


Jan. 9 2017, Updated 10:36 a.m. ET

Correlation coefficient

In this part, we’ll analyze the correlation between Halliburton’s (HAL) stock price and West Texas Intermediate (or WTI) crude oil’s price. The correlation coefficient between these two prices 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.

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Halliburton’s correlation with crude oil

The correlation coefficient between Halliburton’s stock price and crude oil prices from January 2016 to January 2017 is 0.69. This indicates a relatively strong positive relationship between crude oil prices and Halliburton stock.

Correlation between HAL’s stock and crude oil

As noted in the chart above, the VanEck Vectors Oil Services ETF’s (OIH) correlation with crude oil since January 2016 is 0.72. OIH is an ETF tracking index of 25 OFS companies.

Schlumberger’s (SLB) correlation coefficient since January 2016 is 0.64, while Baker Hughes’s (BHI) correlation coefficient since January 2016 is 0.56. Weatherford International’s (WFT) correlation coefficient during the same period is ~0.50.

In the final part of this series, we’ll discuss Wall Street analysts’ recommendations for HAL.


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