Correlation between Weatherford and crude oil
Weatherford International (WFT) stock and crude oil prices have had a steady positive correlation in the past year. The correlation coefficient between Weatherford International’s stock price and WTI (West Texas Intermediate) crude oil prices from August 4, 2016, to August 4, 2017, is 0.45.
What does Weatherford’s correlation with crude oil mean?
Investors might note that a steady correlation could turn out to be an advantage for Weatherford’s stock price if crude oil prices continue to follow the current uptrend in the future. Weatherford’s correlation with crude oil prices has fallen in the trailing year to August 2017—compared to August 2016. In comparison, the VanEck Vectors Oil Services ETF’s (OIH) correlation with crude oil is higher in the trailing year to August 4, 2017—compared to August 2016.
Correlation between Weatherford’s peers and crude oil
OIH’s correlation with crude oil since August 4, 2016, is 0.72—as noted in the above graph. Core Laboratories’ (CLB) correlation coefficient is 0.50 since August 4, 2016, while Patterson-UTI Energy’s (PTEN) correlation coefficient is 0.64 since August 4, 2016. During the same period, Oceaneering International’s (OII) correlation coefficient is 0.58.
Read The Oilfield Equipment and Services Industry: A Primer to learn about the OFS industry.