Title:
1-s2.0-S014098831400276X-main
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Description: Using a binomial probability distribution model this paper creates an endurance index of oil service investor
sentiment. The index reflects the probability of the high or low stock price being the close price for the PHLX
Oil Service Sector Index. Results of this study reveal the substantial forecasting ability of the sentiment endurance
index. Monthly and quarterly rolling forecasts of returns of oil service stocks have an overall accuracy as high as
52 to 57 . In addition, the index shows decent forecasting ability on changes in crude oil prices, especially, WTI
prices. The accuracy of 6-quarter rolling forecasts is 55 . The sentiment endurance index, along with the procedure
of true forecasting and accuracy ratio, applied in this study provides investors and analysts of oil service
sector stocks and crude oil prices as well as energy policy-makers with effective analytical tools.
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