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Analyzing the Correlation between Weatherford and Crude Oil

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Correlation coefficient

In this part, we’ll analyze the correlation between Weatherford International’s (WFT) stock price and WTI (West Texas Intermediate) crude oil’s price. The correlation coefficient between Weatherford International 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.

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Correlation between Weatherford and crude oil

The correlation coefficient between Weatherford International’s stock price and crude oil prices from March 2016 to the present is 0.48. It indicates a relatively steady and positive relationship between crude oil prices and Weatherford International stock.

Correlation between Weatherford stock and crude oil

As noted in the above table, the VanEck Vectors Oil Services ETF’s (OIH) correlation with crude oil since March 2016 is 0.71. OIH is an ETF tracking index of 25 oilfield services and equipment companies. Patterson-UTI Energy’s (PTEN) correlation coefficient since March 2016 is 0.63, while McDermott International’s (MDR) correlation coefficient since March 2016 is 0.56. During the same period, Tidewater’s (TDW) correlation coefficient is 0.36.

Next, we’ll discuss Wall Street analysts’ recommendations for Weatherford International.

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