National Oilwell Varco’s correlation with crude oil
The correlation between National Oilwell Varco’s (NOV) stock price and crude oil prices on April 16–July 16 was 0.52. The correlation shows that there’s a strong positive relationship between National Oilwell Varco stock and crude oil prices.
The VanEck Vectors Oil Services ETF’s (OIH) correlation with crude oil since April 16 was 0.71. The correlation shows the sector’s high sensitivity to crude oil prices. OIH’s correlation with crude oil was higher in the trailing three months to April 16 compared to the past year since July 16, 2017.
Has the correlation changed?
National Oilwell Varco’s correlation with crude oil prices was lower in the trailing three months to July 16—compared to the past year. Crude oil prices are ~48% higher compared to a year ago. Lower or falling correlations with oil mean that oil prices have less of an impact on stocks’ movements on a daily basis and vice versa.
In the past three months, Oil States International’s (OIS) correlation with crude oil was 0.98—the highest in the OFS (oilfield equipment and services) industry. In comparison, Flotek Industries’ (FTK) correlation with crude oil was 0.03—the lowest in the past three months in the OFS industry.
Next, we’ll discuss Wall Street analysts’ recommendations for National Oilwell Varco.