Correlation with Crude Oil: SLB, HAL, NOV, and WFT



Correlation coefficient

In this part, we’ll analyze the correlation between West Texas Intermediate (or WTI) crude oil with the stock prices of Schlumberger (SLB), Halliburton (HAL), Weatherford International (WFT), and National Oilwell Varco (NOV)

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Schlumberger’s correlation with crude oil

The correlation coefficient between Schlumberger’s stock price and crude oil prices from May 23, 2016, to May 23, 2017, is 0.63. This indicates a relatively strong positive relationship between crude oil prices and Schlumberger stock. 

The correlation coefficient between Schlumberger and the Dow Jones Industrial Average (DJIA-INDEX) is 0.53.

Correlation between HAL, WFT, and NOV stock and crude oil prices

As noted in the graph above, the VanEck Vectors Oil Services ETF’s (OIH) correlation with crude oil since May 2016 is 0.72. OIH is a tracking index of 25 oilfield services (or OFS) companies. 

Halliburton’s correlation coefficient since May 2016 is 0.67, while Weatherford International’s (WFT) correlation coefficient since May 2016 is 0.48. National Oilwell Varco’s correlation coefficient during the same period is ~0.61. 

You can read more about crude oil prices in Market Realist’s A key investor’s guide to the crude oil market.

In the next article, we’ll look at investors’ short interest in these OFS stocks.


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