Behind Patterson-UTI’s Correlation with Crude on April 12


Apr. 17 2017, Updated 7:36 a.m. ET

Correlation coefficient

In this penultimate part of our series, we’ll analyze the correlation between Patterson-UTI Energy’s (PTEN) stock price and the price of WTI (West Texas Intermediate) crude oil. The correlation coefficient between PTEN’s and crude oil’s price measures the statistical relationship between the two variables. A correlation coefficient value of zero to 1.0 shows a positive correlation, whereas zero states no correlation, and -1.0 to zero shows an inverse correlation.

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PTEN’s correlation with crude oil prices

The correlation coefficient between Patterson-UTI Energy’s stock price and the price of crude oil from April 12, 2016, to April 12, 2017, stands at 0.63. This indicates a relatively strong positive relationship between crude oil prices and PTEN’s stock.

Correlations between OFS stocks and crude oil

The VanEck Vectors Oil Services ETF (OIH), an ETF tracking index of 25 oilfield equipment and services companies, has had a correlation of 0.71 with crude oil since April 2016. Tidewater’s (TDW) correlation coefficient with crude oil since April 2016 stands at 0.31, while CARBO Ceramics’ (CRR) correlation coefficient since April 2016 stands at 0.45.

Oceaneering International’s (OII) correlation coefficient during the same period stands at 0.58, while the correlation coefficient between the Dow Jones Industrial Average (DJIA-INDEX) and Patterson-UTI Energy stands at 0.42.

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


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