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How Baker Hughes Is Reacting to Crude Oil Price Changes

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Correlation between Baker Hughes and crude oil

The correlation coefficient between Baker Hughes, a GE Company’s (BHGE), stock price and crude oil prices from April 12, 2017, to April 12, 2018, was -0.06. This level indicates a negative relationship between Baker Hughes’s stock and crude oil prices. A negative correlation means the stock’s price moved inverse to the crude oil’s price movement.

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Has BHGE’s correlation with crude oil prices changed?

As the graph above shows, BHGE’s correlation with crude oil prices was much lower in the trailing year up to April 12, 2018, compared to the previous year up to April 12, 2017. OIH’s correlation with crude oil was also lower in the trailing year to April 12, 2018, versus the previous year.

Correlation between BHGE’s peers and crude oil price

Flotek Industries’ (FTK) correlation coefficient since April 12, 2017, was 0.40, which was lower than FTK’s correlation with crude oil in the previous year. Tidewater’s (TDW) correlation coefficient since April 12, 2017, was 0.25, which was lower than its correlation with crude oil in the previous year. Precision Drilling Corporation’s (PDS) correlation coefficient from April 12, 2017, to April 12, 2018, was 0.51. This correlation was lower than PDS’s correlation with crude oil in the previous year.

Next in this series, we’ll discuss sell-side analysts’ recommendations for BHGE.

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