uploads///Correlation

Inside Halliburton’s Correlation with Crude Oil on April 28

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May. 2 2017, Updated 7:40 a.m. ET

Correlation coefficient

In this part, we’ll analyze the correlation between Halliburton’s (HAL) stock price and the price of WTI (West Texas Intermediate) crude oil. The correlation coefficient between stock prices and the price of crude oil measures the statistical relationship between both variables. A correlation coefficient value of 0 to 1 shows a positive correlation, while 0 states no correlation, and -1 to 0 shows an inverse correlation. 

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Halliburton’s correlation with crude oil price

The correlation coefficient between Halliburton’s stock price and the price of crude oil from April 28, 2016, to April 28, 2017, is 0.66. This indicates a relatively strong positive relationship between crude oil prices and Halliburton’s stock.

OFS stocks and crude oil

As noted in the graph above, the VanEck Vectors Oil Services ETF’s (OIH) correlation with crude oil since April 2016 is 0.70. OIH is an ETF-tracking index of 25 oilfield equipment and services companies.

Core Laboratories’ (CLB) correlation coefficient with crude oil since April 2016 is 0.56, while Precision Drilling’s (PDS) correlation coefficient since April 2016 is 0.64. Tidewater’s (TDW) correlation coefficient since April 2016 is 0.31.

In the next and final part, we’ll discuss investors’ short interest in HAL.

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