Southwest Airlines Correlations

LUV Stock

USD 31.97 0.18 0.57%

The current 90-days correlation between Southwest Airlines and United Airlines Holdings is 0.4 (i.e., Very weak diversification). The correlation of Southwest Airlines is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak. If the correlation is 0, the equities are not correlated; they are entirely random.

Southwest Airlines Correlation With Market

Weak diversification

The correlation between Southwest Airlines and DJI is 0.3 (i.e., Weak diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Southwest Airlines and DJI in the same portfolio, assuming nothing else is changed.

Check out Correlation Analysis to better understand how to build diversified portfolios, which includes a position in Southwest Airlines. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as signals in employment.

For more information on how to buy Southwest Stock please use our How to Invest in Southwest Airlines guide.

Moving together with Southwest Stock

0.77	VLRS	Volaris	Pair Corr
0.65	WERN	Werner Enterprises	Pair Corr
0.86	AAL	American Airlines Fiscal Year End 23rd of January 2025	Pair Corr
0.86	ALK	Alaska Air Group Fiscal Year End 23rd of January 2025	Pair Corr
0.74	CPA	Copa Holdings SA	Pair Corr
0.62	CSX	CSX Corporation Aggressive Push	Pair Corr
0.88	DAL	Delta Air Lines Fiscal Year End 10th of January 2025	Pair Corr
0.69	NSC	Norfolk Southern Fiscal Year End 24th of January 2025	Pair Corr
0.86	UAL	United Airlines Holdings Fiscal Year End 27th of January 2025	Pair Corr
0.74	ULH	Universal Logistics	Pair Corr
0.66	XPO	XPO Logistics	Pair Corr
0.71	ATCOL	Atlas Corp	Pair Corr
0.67	ODFL	Old Dominion Freight	Pair Corr
0.88	ALGT	Allegiant Travel	Pair Corr
0.79	SAIA	Saia Inc	Pair Corr
0.7	ATSG	Air Transport Services	Pair Corr
0.87	SKYW	SkyWest	Pair Corr
0.76	SNDR	Schneider National	Pair Corr
0.71	SNCY	Sun Country Airlines	Pair Corr

Moving against Southwest Stock

0.77	FLYX	flyExclusive,	Pair Corr
0.74	CP	Canadian Pacific Railway	Pair Corr
0.71	CNI	Canadian National Railway Fiscal Year End 28th of January 2025	Pair Corr
0.55	UNP	Union Pacific Fiscal Year End 23rd of January 2025	Pair Corr
0.73	MESA	Mesa Air Group Fiscal Year End 24th of January 2025	Pair Corr
0.59	AIRT	Air T Inc	Pair Corr
0.36	AZUL	Azul SA	Pair Corr
0.78	BA	Boeing Fiscal Year End 29th of January 2025	Pair Corr
0.73	BEST	BEST Inc	Pair Corr

Related Correlations Analysis

	UAL	AAL	JBLU	SAVE	DAL	ULCC
UAL		0.99	0.5	-0.37	0.99	0.82	UAL
AAL	0.99		0.49	-0.34	0.97	0.82	AAL
JBLU	0.5	0.49		-0.37	0.54	0.83	JBLU
SAVE	-0.37	-0.34	-0.37		-0.34	-0.27	SAVE
DAL	0.99	0.97	0.54	-0.34		0.83	DAL
ULCC	0.82	0.82	0.83	-0.27	0.83		ULCC
	UAL	AAL	JBLU	SAVE	DAL	ULCC

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Correlation Matchups

Over a given time period, the two securities move together when the Correlation Coefficient is positive. Conversely, the two assets move in opposite directions when the Correlation Coefficient is negative. Determining your positions' relationship to each other is valuable for analyzing and projecting your portfolio's future expected return and risk.

High positive correlations

AAL	+ 0.99	UAL
DAL	+ 0.99	UAL
DAL	+ 0.97	AAL
ULCC	+ 0.83	JBLU
ULCC	+ 0.83	DAL
ULCC	+ 0.82	UAL

High negative correlations

SAVE	- 0.37	JBLU
SAVE	- 0.37	UAL
DAL	- 0.34	SAVE
SAVE	- 0.34	AAL
ULCC	- 0.27	SAVE

Risk-Adjusted Indicators

There is a big difference between Southwest Stock performing well and Southwest Airlines Company doing well as a business compared to the competition. There are so many exceptions to the norm that investors cannot definitively determine what's good or bad unless they analyze Southwest Airlines' multiple risk-adjusted performance indicators across the competitive landscape. These indicators are quantitative in nature and help investors forecast volatility and risk-adjusted expected returns across various positions.

	Mean Deviation	Jensen Alpha	Sortino Ratio	Treynor Ratio	Semi Deviation	Expected Shortfall	Potential Upside	Value @Risk	Maximum Drawdown
UAL	2.00	1.06	0.76	0.65	0.48	(2.61)	6.47	(1.92)	16.43
AAL	1.74	0.37	0.23	0.38	1.45	(2.07)	6.14	(2.77)	11.24
JBLU	2.99	0.25	0.08	0.25	4.04	(3.19)	7.53	(6.73)	31.32
SAVE	7.96	(1.55)	0.00	0.88	0.00	0.00	15.29	(21.43)	112.38
DAL	1.73	0.52	0.41	0.44	0.88	(2.29)	4.11	(2.12)	9.95
ULCC	3.35	0.57	0.16	0.33	4.57	(3.95)	10.08	(3.98)	34.82

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