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How Is Weatherford Reacting to Crude Oil’s Change?

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Weatherford International’s correlation with crude oil

The correlation between Weatherford International’s (WFT) stock price and crude oil’s price from April 17 to July 16 was 0.03. This represents a weak positive relationship between WFT’s stock and crude oil prices.

The VanEck Vectors Oil Services ETF’s (OIH) correlation with crude oil since April 17 was 0.65. This shows the high sensitivity of the sector as a whole to crude oil prices. The VanEck Vectors Oil Services ETF’s correlation with crude oil was marginally lower in the trailing three months to April 17 versus the past year since July 17, 2017.

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Has WFT’s correlation with crude oil’s price changed?

WFT’s correlation with the crude oil price was significantly lower in the trailing three months to July 17 compared to the past year. Crude oil’s price is now ~47.0% higher compared to a year ago. Lower or falling correlations with oil mean lower or decreasing influence of oil prices on the movements of these stocks on a daily basis, and vice versa.

Correlation between WFT’s peers and crude oil price

In the past three months, Halliburton’s (HAL) correlation with crude oil was 0.64—the highest in the oilfield equipment and services (or OFS) industry. In comparison, Flotek Industries’ (FTK) correlation with crude oil was 0.07, which was the closest to WFT’s correlation with crude oil in the past three months.

In the final part of this series, we’ll discuss Wall Street analysts’ recommendations for WFT.

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