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Correlation between Schlumberger and Crude Oil on July 14

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Jul. 18 2017, Updated 6:39 a.m. ET

Correlation between Schlumberger and crude oil

The correlation coefficient between Schlumberger (SLB) stock and WTI (West Texas Intermediate) crude oil prices from July 14, 2016, to July 14, 2017, is 0.62. That means Schlumberger and crude oil prices have been strongly correlated in the past year.

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What does SLB’s correlation with crude oil mean?

A high correlation may not bode well for SLB stock with crude oil prices weakening over the past four months. Analysts expect a limited scope to a rise in crude oil prices in the near future. SLB’s correlation with crude oil has fallen in the trailing year to July 2017 compared to the same period in 2016. OIH’s correlation with crude oil is also higher in the trailing year to July 3, 2017, compared to the previous year.

Correlation between SLB’s peers and crude oil

The correlation of the VanEck Vectors Oil Services ETF (OIH) with crude oil since July 14, 2016, is 0.73. For the same period, Helmerich & Payne’s (HP) correlation coefficient is 0.58, while McDermott International’s (MDR) is 0.45 and Oil States International’s (OIS) is 0.57.

You can find out more about the OFS (oilfield services and equipment) industry in Market Realist’s The Oilfield Equipment and Services Industry: A Primer.

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