How Flotek Industries Reacted to Crude Oil’s Changes



Correlation between Flotek Industries and crude oil

The correlation coefficient between Flotek Industries’ (FTK) stock price and crude oil’s price from October 16, 2016, to October 16, 2017, was 0.22. This shows a weak positive relationship between crude oil prices and FTK stock.

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Has FTK’s correlation with crude oil price changed?

As noted in the graph above, FTK’s correlation with crude oil’s price was lower in the trailing year to October 16, 2017, compared to the previous year to October 16, 2016. Crude oil’s price is 4% higher than a year ago. 

A low correlation may not benefit the upside potential in FTK’s stock price because crude oil’s price is exhibiting signs of moving upward in the near future. OIH’s correlation with crude oil was also lower in the trailing year to October 16, 2017, versus the previous year.

Correlation between FTK’s peers and crude oil price

Oceaneering International’s (OII) correlation coefficient since October 16, 2016, is 0.54. Tidewater’s (TDW) correlation coefficient since October 16 is 0.18. Precision Drilling Corporation’s (PDS) correlation coefficient during the same period is 0.63.

Like Flotek Industries, the correlation coefficient between the stock prices of OII, TDW, and PDS and crude oil prices have decreased in the trailing year to October 16, 2017, compared to the year before that.

In the final part of this series, we’ll discuss the sell-side analysts’ recommendations for FTK.


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