uploads/2018/01/Correlation-3.jpg

Halliburton Reacts to the Crude Oil Price Change

By

Updated

Correlation between Halliburton and crude oil

The correlation coefficient between Halliburton’s (HAL) stock price and crude oil prices from January 4, 2017, to January 4, 2018, was 0.57. It indicates a healthy and positive relationship between Halliburton stock and crude oil prices. The VanEck Vectors Oil Services ETF’s (OIH) correlation with crude oil since January 4, 2017, was 0.65. OIH is an ETF that tracks an index of 25 OFS (oilfield equipment and services) companies. Halliburton’s correlation with the Dow Jones Industrial Average (DJIA-INDEX) since January 4, 2017, was 0.29.

Article continues below advertisement

Has Halliburton’s correlation with crude oil price changed?

As noted in the above graph, Halliburton’s correlation with crude oil prices was lower in the trailing year to January 4, 2018—compared to the previous year to January 4, 2017. Crude oil prices are 15% higher compared to a year ago. A high correlation could benefit any upside potential in Halliburton’s stock price. OIH’s correlation with crude oil was also lower in the trailing year to January 4, 2018—compared to the previous year.

Correlation between Halliburton’s peers and crude oil prices

National Oilwell Varco’s (NOV) correlation coefficient since January 4, 2017, was 0.53, while CARBO Ceramics’ (CRR) correlation coefficient was 0.44. During the same period, Flotek Industries’ (FTK) correlation coefficient was 0.33. Read What Are National Oilwell Varco’s Challenges and Opportunities? to learn more.

Similar to Halliburton, the correlation coefficient between CARBO Ceramics and Flotek Industries’ stock price and crude oil prices fell in the trailing year to January 2018—compared to the previous year. The correlation coefficient between National Oilwell Varco’s stock price and crude oil prices rose in the trailing year to January 2018—compared to the previous year.

Next, we’ll discuss sell-side analysts’ recommendations for Halliburton.

Advertisement

More From Market Realist