Correlation between Schlumberger and crude oil
Schlumberger’s (SLB) correlation with crude oil prices on December 15–22 was 0.62. Schlumberger’s correlation with the Dow Jones Industrial Average (DJIA-INDEX) on December 15–22 was 0.86.
Correlation with crude oil and its implication
The West Texas Intermediate crude oil price has risen 10% since December 23, 2016. In fact, crude oil prices have risen significantly since the end of June 2017. Analysts don’t expect much impending downside in crude oil prices. A strong positive correlation can help Schlumberger’s stock price if crude oil rises. Schlumberger’s correlation with crude oil prices rose in the week to December 22, 2017—compared to the week ending December 22, 2016.
Schlumberger’s positive correlation with the Dow Jones Industrial Average would mean that it’s profiting from record highs that broader equity markets have been achieving.
Correlation between oilfield services companies and crude oil
The correlation coefficient of the VanEck Vectors Oil Services ETF (OIH) with crude oil since December 15, 2017, was 0.27. Core Laboratories’ (CLB) correlation with crude oil since December 15, 2017, was 0.33. Patterson-UTI Energy’s (PTEN) correlation coefficient since December 15, was 0.46%. Oceaneering International’s (OII) correlation coefficient, since December 15, was 0.02.
To learn more, read The 5 Worst Oilfield Companies by Year-to-Date Returns.