Weatherford and crude oil
The correlation coefficient between WTI (West Texas Intermediate) crude oil prices and Weatherford International (WFT) stock from August 25, 2016, to August 25, 2017, is 0.44. That shows that Weatherford International and crude oil prices have had a steady positive correlation in the past year.
What does Weatherford’s correlation with crude oil mean?
A steady correlation may not be beneficial to Weatherford stock if the downward trend for crude oil prices continues. WFT’s correlation with the price of crude oil is lower in the trailing year through August 25, 2017, compared to the previous year through August 25, 2016. In comparison, the VanEck Vectors Oil Services ETF’s (OIH) correlation with crude oil is nearly the same in the trailing year to August 25, 2017, compared to the previous year to August 25, 2016.
Correlation between WFT’s peers and crude oil
The VanEck Vectors Oil Services ETF’s correlation with crude oil since August 25, 2016, is 0.71, as noted in the graph above. Helmerich & Payne’s (HP) correlation coefficient since August 25, 2016, is 0.58, while McDermott International’s (MDR) correlation coefficient since August 25, 2016, is 0.46. Oil States International’s (OIS) correlation coefficient during the same period is 0.54.
You can find out more about the oilfield services and equipment industry in Market Realist’s The Oilfield Equipment and Services Industry: A Primer.