uploads/2018/05/Correlation.jpg

Schlumberger and Halliburton’s Correlation with Crude Oil

By

Updated

Schlumberger’s correlation with crude oil

In this part, we’ll analyze the correlation between Schlumberger (SLB) and Halliburton’s (HAL) stock prices with the West Texas Intermediate crude oil price.

The correlation coefficient between Schlumberger’s stock price and crude oil prices from May 3, 2017, to May 3, 2018, was 0.53. The correlation indicates a strong positive relationship between Schlumberger stock and crude oil prices. However, the correlation was lower compared to Schlumberger’s correlation with crude oil the previous year. The correlation coefficient between Schlumberger and the VanEck Vectors Oil Services ETF (OIH) was 0.85 since May 3, 2017.

Article continues below advertisement

Halliburton and crude oil

As noted in the above graph, OIH’s correlation with crude oil since May 3, 2017, was 0.66. The correlation was lower compared to OIH’s correlation with crude oil in the previous year. Halliburton’s correlation coefficient with crude oil prices since May 3, 2017, was 0.56. The correlation was lower compared to Halliburton’s correlation with crude oil the previous year.

A high correlation means that the stock was impacted more by crude oil’s movement. A low correlation implies that the stock was impacted less by crude oil’s movement.

Next, we’ll discuss the short interest in Schlumberger and Halliburton.

Advertisement

More From Market Realist