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Weatherford Reacts to Crude Oil Price Changes

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Oct. 13 2017, Updated 8:07 a.m. ET

Weatherford International’s correlation with crude oil

The correlation coefficient between Weatherford International’s (WFT) stock price and crude oil prices from October 10, 2016, to October 10, 2017, was 0.40. It represents a moderately positive relationship between Weatherford’s stock price and crude oil prices. The VanEck Vectors Oil Services ETF’s (OIH) correlation coefficient with crude oil in the past year until October 10, 2017, was 0.68. Weatherford’s correlation coefficient with the Dow Jones Industrial Average (DJIA-INDEX) since October 10, 2016, was 0.29.

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Has Weatherford’s correlation with crude oil prices changed?

Weatherford’s correlation with crude oil prices is lower in the trailing year to October 10, 2017—compared to the previous year to October 10, 2016. Crude oil prices are nearly at the same level as last year. A relatively benign correlation might not bode well for Weatherford’s stock price. Crude oil prices have been strong since the third week of June 2017. A low correlation implies that Weatherford’s stock price might not benefit much if crude oil prices rise in the near term. The VanEck Vectors Oil Services ETF’s correlation with crude oil was lower in the trailing year to October 10, 2017—compared to the previous two years.

Correlation between Weatherford’s peers and crude oil prices

Helmerich & Payne’s (HP) correlation coefficient since October 10, 2016, was 0.56, while McDermott International’s (MDR) correlation coefficient since October 10, 2016, was 0.43. Oil States International’s (OIS) correlation coefficient from October 2016 to October 2017 was 0.50.

Compared to Weatherford International, the correlation coefficient between Helmerich & Payne, McDermott International, and Oil States International’s stock prices and crude oil prices fell in the trailing year to October 2017—compared to the previous year.

Next, we’ll discuss Wall Street analysts’ recommendations for Weatherford.

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