Schlumberger’s implied volatility
On October 13, 2017, Schlumberger’s (SLB) implied volatility was 18.7%. Since its 2Q17 financial results were announced on July 21, 2017, Schlumberger’s implied volatility has remained nearly unchanged. During the same period, SLB stock rose 1.0%. SLB makes up 3.1% of the SPDR S&P Oil & Gas Equipment & Services ETF (XES). XES has risen 2.0% since July 21, 2017.
Schlumberger’s 7-day stock price forecast
Schlumberger stock will likely close between $68.91 and $65.42 in the next seven days based on its implied volatility. Schlumberger’s seven-day stock price forecast considers a normal distribution of stock prices and one standard deviation probability of 68.2%. SLB stock was $67.17 on October 13, 2017.
Implied volatility for SLB’s peers
National Oilwell Varco’s (NOV) implied volatility on October 13, 2017, was ~27.0%, which implies that NOV stock can vary between $35.95 and $33.35 in the next seven days. Helmerich & Payne’s (HP) implied volatility was ~32.0% on October 13, 2017. That implies that HP stock could range between $54.51 and $49.89 in the next seven days. Tidewater’s (TDW) implied volatility was ~76.0% on October 13, 2017. That implies that TDW stock could vary between $29.32 and $23.74 in the next seven days. You can read a free cash flow comparison of oilfield services companies in Market Realist’s Oilfield Services Stocks: Free Cash Flow Winners and Losers.
Crude oil’s implied volatility
On October 13, 2017, crude oil’s implied volatility was 24.1%. Since July 21, 2017, crude oil’s volatility decreased, while SLB’s implied volatility decreased marginally. Since July 21, 2017, the S&P 500 Index (SPX-INDEX) has risen 3.0%. The energy sector makes up 6.0% of the SPX-INDEX.
Next, let’s look at SLB’s correlation coefficient with crude oil.