In this part, we’ll analyze the correlation between Baker Hughes’s (BHI) stock price and West Texas Intermediate crude oil’s price. The correlation coefficient between Baker Hughes 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.
Baker Hughes’s correlation with crude oil price
The correlation coefficient between Baker Hughes’s stock price and crude oil prices from October 2015 to the present is 0.63. It shows a relatively strong positive relationship between crude oil prices and Baker Hughes stock.
Correlation between BHI’s peers and crude oil
As noted in the above graph, 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. Tidewater’s (TDW) correlation coefficient with crude oil since January 2016 is 0.38, while McDermott International’s (MDR) correlation coefficient since January 2016 is 0.56. Weatherford International’s (WFT) correlation coefficient is 0.49 during the same period.
Next, we’ll discuss Wall Street analysts’ recommendations for Baker Hughes.