In this part, we’ll analyze the correlation between Schlumberger’s (SLB) stock price and West Texas Intermediate crude oil prices. The correlation coefficient between Schlumberger’s stock price and crude oil 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.
Correlation between Schlumberger and crude oil prices
The correlation coefficient between Schlumberger’s stock price and crude oil prices from February 2016 to the present is 0.48. It indicates a relatively strong positive relationship between crude oil prices and Schlumberger stock.
Correlation between Schlumberger stock and crude oil
As noted in the above table, the VanEck Vectors Oil Services ETF’s (OIH) correlation with crude oil since February 2016 is 0.71. OIH is an ETF tracking index of 25 OFS companies. Halliburton’s (HAL) correlation coefficient since December 2015 is 0.66, while CARBO Ceramics’ (CRR) correlation coefficient since February 2016 is 0.49. During the same period, Core Laboratories’ (CLB) correlation coefficient is 0.55. To learn more about Halliburton, read Halliburton: A Word on the 4Q16 Results.
Next, we’ll discuss Schlumberger’ returns versus industry indicators.