What Is Patterson-UTI Energy’s Correlation with Crude Oil?



Correlation coefficient

In this part, we’ll analyze the correlation between Patterson-UTI Energy’s (PTEN) stock price and West Texas Intermediate (or WTI) crude oil’s price. The correlation coefficient between PTEN’s stock price 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.

Article continues below advertisement

Patterson-UTI Energy’s correlation with crude oil price

The correlation coefficient between Patterson-UTI Energy’s (PTEN) stock price and crude oil prices from January 2016 to January 2017 is 0.64. This indicates a relatively strong positive relationship between crude oil prices and Patterson-UTI Energy’s stock.

Correlation between OFS stocks and crude oil

As noted in the graph above, the VanEck Vectors Oil Services ETF’s (OIH) correlation with crude oil since January 2016 is 0.64. OIH is an ETF tracking index of 25 OFS companies.

Flotek Industries’s (FTK) correlation coefficient with crude oil since January 2016 is 0.47, while CARBO Ceramics’s (CRR) correlation coefficient since January 2016 is 0.51. Precision Drilling Corporation’s (PDS) correlation coefficient during the same period is 0.65.

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


More From Market Realist