Correlation between Weatherford and crude oil
From November 17–24, 2017, Weatherford International’s (WFT) correlation with the price of WTI (West Texas Intermediate) crude oil was -0.33. WFT’s correlation with the Dow Jones Industrial Average (DJIA-INDEX) from November 17–24, 2017, was also negative.
What does Weatherford’s correlation with crude oil imply?
Weatherford’s negative correlation coefficient with crude oil doesn’t benefit WFT stock if crude oil’s current momentum continues. Its correlation with the price of crude oil during the week ended November 17, 2017, was a steep decline compared to the week ended November 17, 2016, as shown in the graph above.
The VanEck Vectors Oil Services ETF’s (OIH) correlation with crude oil was positive during the week ended November 24, 2017, but substantially lower than the correlation in the week ended November 24, 2016.
Correlation between WFT’s peers and crude oil
Carbo Ceramics’ (CRR) correlation coefficient since November 17, 2017, was 0.35, while Tetra Technologies’ (TTI) correlation coefficient since November 17, 2017, was -0.26. Halliburton’s (HAL) correlation coefficient during the same period was 0.53.
You can learn about the OFS industry in Market Realist’s The Oilfield Equipment and Services Industry: A Primer. Also read Market Realist’s Top 5 OFS Companies Based on 2017 Returns.