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How Is Halliburton Reacting to the Crude Oil Price Change?

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Correlation between Halliburton and crude oil

The correlation coefficient between Halliburton’s (HAL) stock price and the crude oil price from April 16, 2017, to April 16, 2018, was 0.56, which indicates a healthy positive relationship between Halliburton stock and crude oil prices.

The VanEck Vectors Oil Services ETF’s (OIH) correlation with crude oil since April 16, 2017, was 0.66. OIH is an ETF that tracks an index of 25 oilfield equipment and services (or OFS) companies. OIH’s correlation with crude oil was lower in the trailing year to April 16, 2018, than the previous year. Halliburton’s correlation with OIH since April 16, 2017, was 0.88.

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Has HAL’s correlation with crude oil price changed?

As noted in the graph above, HAL’s correlation with the crude oil price was higher in the trailing year to April 16, 2018, compared to the previous year to April 16, 2017. The crude oil price is now 26% higher than a year ago. A high correlation can benefit upside potential in HAL’s stock price.

Correlation between HAL’s peers and crude oil price

Weatherford International’s (WFT) correlation coefficient since April 16, 2017, was 0.42. This was unchanged compared to WFT’s correlation with crude oil in the previous year. CARBO Ceramics’ (CRR) correlation coefficient since April 16, 2017, was 0.45. This was marginally higher than CRR’s correlation with crude oil in the previous year. TETRA Technologies’ (TTI) correlation coefficient during the same period was 0.43, which was lower than TTI’s correlation with crude oil in the previous year.

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

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