Correlation between Schlumberger and crude oil
In the week ending July 27, Schlumberger’s (SLB) correlation with crude oil was 0.48. The relatively strong correlation implies that the stock closely tracked crude oil’s movements. Last week, Schlumberger’s correlation with the VanEck Vectors Oil Services ETF (OIH) was 0.91.
Schlumberger’s correlation with crude oil
The WTI crude oil price has risen significantly since the end of June 2017. A positive correlation could have a positive impact on Schlumberger’s stock price if crude oil rises from the current level. However, a positive correlation also implies that if the crude oil price slips from here, it can affect SLB negatively. Schlumberger’s correlation with crude oil rose in the week ending July 27 compared to Schlumberger’s correlation with crude oil in the past three months since April 27.
Correlation between oilfield services companies and crude oil
Last week, the VanEck Vectors Oil Services ETF’s (OIH) correlation with crude oil was 0.56, higher than in the past three months, which shows the high sensitivity of the sector as a whole to crude oil prices.
Last week, Precision Drilling’s (PDS) correlation with crude oil was 0.58, the highest in the oilfield equipment and services (or OFS) industry. In comparison, Flotek Industries’ (FTK) correlation with crude oil was 0.02, the lowest in the past week. Key Energy Services’ (KEG) correlations with crude oil was also close to zero in the past week, which shows FTK’s and KEG’s stock price movements were relatively unrelated to crude oil’s changes in the past week.
For more on Schlumberger, read Market Realist’s Analyzing Schlumberger’s Drivers in Q2 2018.