LUV vs. AAL
LUV (Southwest Airlines Co.) and AAL (American Airlines Group Inc.) are both stocks. Both operate in the Airlines industry within the Industrials sector. Over the past 10 years, LUV returned 3.84%/yr vs -4.65%/yr for AAL. A 0.66 correlation means they provide meaningful diversification when combined.
Performance
LUV vs. AAL - Performance Comparison
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Returns By Period
In the year-to-date period, LUV achieves a 20.59% return, which is significantly higher than AAL's 5.28% return. Over the past 10 years, LUV has outperformed AAL with an annualized return of 3.84%, while AAL has yielded a comparatively lower -4.65% annualized return.
LUV
- 1D
- 1.73%
- 1M
- 21.45%
- YTD
- 20.59%
- 6M
- 20.45%
- 1Y
- 57.90%
- 3Y*
- 15.83%
- 5Y*
- -0.40%
- 10Y*
- 3.84%
AAL
- 1D
- 0.37%
- 1M
- 16.53%
- YTD
- 5.28%
- 6M
- 3.46%
- 1Y
- 48.07%
- 3Y*
- -0.25%
- 5Y*
- -6.30%
- 10Y*
- -4.65%
LUV vs. AAL - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | |
|---|---|---|---|---|---|---|---|---|---|---|
LUV Southwest Airlines Co. | 20.59% | 25.62% | 19.11% | -11.82% | -21.41% | -8.09% | -13.32% | 17.72% | -28.21% | 32.40% |
AAL American Airlines Group Inc. | 5.28% | -12.05% | 26.86% | 8.02% | -29.18% | 13.89% | -44.81% | -9.57% | -37.69% | 12.40% |
Correlation
The correlation between LUV and AAL is 0.74, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.
| Correlation | |
|---|---|
Correlation (1Y) Calculated over the trailing 1-year period | 0.74 |
Correlation (3Y) Calculated over the trailing 3-year period | 0.67 |
Correlation (5Y) Calculated over the trailing 5-year period | 0.73 |
Correlation (10Y) Calculated over the trailing 10-year period | 0.72 |
Correlation (All Time) Calculated using the full available price history since Sep 27, 2005 | 0.66 |
The correlation between LUV and AAL has been stable across timeframes, ranging from 0.66 to 0.74 - a consistent structural relationship.
Fundamentals
LUV:
$24.85B
AAL:
$10.67B
LUV:
$1.56
AAL:
$0.31
LUV:
31.61
AAL:
52.81
LUV:
0.89
AAL:
0.19
LUV:
$28.88B
AAL:
$55.99B
LUV:
$6.36B
AAL:
$12.21B
LUV:
$2.74B
AAL:
$4.16B
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Return for Risk
LUV vs. AAL — Risk / Return Rank
LUV
AAL
LUV vs. AAL - Risk-Adjusted Trends Comparison
This table presents a comparison of risk-adjusted performance metrics for Southwest Airlines Co. (LUV) and American Airlines Group Inc. (AAL). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.
Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.
| LUV | AAL | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | +0.30 | ||
| Sortino ratioReturn per unit of downside risk | +0.36 | ||
| Omega ratioGain probability vs. loss probability | 1.25 | 1.19 | +0.06 |
| Calmar ratioReturn relative to maximum drawdown | 1.74 | 1.29 | +0.45 |
| Martin ratioReturn relative to average drawdown | 3.44 | 3.02 | +0.42 |
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Drawdowns
LUV vs. AAL - Drawdown Comparison
The maximum LUV drawdown since its inception was -78.25%, smaller than the maximum AAL drawdown of -97.20%. Use the drawdown chart below to compare losses from any high point for LUV and AAL.
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Drawdown Indicators
| LUV | AAL | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -78.25% | -97.20% | +18.95% |
Max Drawdown (1Y)Largest decline over 1 year | -33.49% | -37.39% | +3.90% |
Max Drawdown (3Y)Largest decline over 3 years | -42.93% | -51.76% | +8.83% |
Max Drawdown (5Y)Largest decline over 5 years | -58.75% | -59.25% | +0.50% |
Max Drawdown (10Y)Largest decline over 10 years | -64.76% | -84.14% | +19.38% |
Current DrawdownCurrent decline from peak | -16.88% | -72.80% | +55.92% |
Average DrawdownAverage peak-to-trough decline | -29.13% | -60.45% | +31.32% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 16.88% | 15.96% | +0.92% |
Volatility
LUV vs. AAL - Volatility Comparison
The current volatility for Southwest Airlines Co. (LUV) is 12.52%, while American Airlines Group Inc. (AAL) has a volatility of 15.04%. This indicates that LUV experiences smaller price fluctuations and is considered to be less risky than AAL based on this measure. The chart below showcases a comparison of their rolling one-month volatility.
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Volatility by Period
| LUV | AAL | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 12.52% | 15.04% | -2.52% |
Volatility (6M)Calculated over the trailing 6-month period | 35.29% | 35.28% | +0.01% |
Volatility (1Y)Calculated over the trailing 1-year period | 45.25% | 49.13% | -3.88% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 38.52% | 48.34% | -9.82% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 37.73% | 52.97% | -15.24% |
Dividends
LUV vs. AAL - Dividend Comparison
LUV's dividend yield for the trailing twelve months is around 1.46%, while AAL has not paid dividends to shareholders.
| Position | TTM | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
AAL American Airlines Group Inc. | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.63% | 1.39% | 1.25% | 0.77% | 0.86% | 0.94% |
LUV Southwest Airlines Co. | 1.46% | 1.74% | 2.14% | 3.12% | 0.00% | 0.00% | 0.39% | 1.30% | 1.30% | 0.73% | 0.75% | 0.66% |
Financials
LUV vs. AAL - Financials Comparison
This section allows you to compare key financial metrics between Southwest Airlines Co. and American Airlines Group Inc.. You can select fields from income statements, balance sheets, and cash flow statements to easily visualize and compare the financial health of both companies.
Total Revenue: Total amount of money received from sales and other business activities
LUV vs. AAL - Profitability Comparison
LUV - Gross Margin
Gross margin is calculated as gross profit divided by revenue. For the three months ending on Jun 2026, Southwest Airlines Co. reported a gross profit of 2.34B and revenue of 7.25B. Therefore, the gross margin over that period was 32.2%.
AAL - Gross Margin
Gross margin is calculated as gross profit divided by revenue. For the three months ending on Jun 2026, American Airlines Group Inc. reported a gross profit of 3.62B and revenue of 13.91B. Therefore, the gross margin over that period was 26.0%.
LUV - Operating Margin
Operating margin is calculated as operating income divided by revenue. For the three months ending on Jun 2026, Southwest Airlines Co. reported an operating income of 330.00M and revenue of 7.25B, resulting in an operating margin of 4.6%.
AAL - Operating Margin
Operating margin is calculated as operating income divided by revenue. For the three months ending on Jun 2026, American Airlines Group Inc. reported an operating income of -41.00M and revenue of 13.91B, resulting in an operating margin of -0.3%.
LUV - Net Margin
Net margin is calculated as net income divided by revenue. For the three months ending on Jun 2026, Southwest Airlines Co. reported a net income of 227.00M and revenue of 7.25B, resulting in a net margin of 3.1%.
AAL - Net Margin
Net margin is calculated as net income divided by revenue. For the three months ending on Jun 2026, American Airlines Group Inc. reported a net income of -382.00M and revenue of 13.91B, resulting in a net margin of -2.8%.
Frequently Asked Questions
LUV and AAL have a correlation of 0.74, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.
AAL has higher volatility (15.04%) compared to LUV (12.52%). In terms of maximum drawdown, LUV dropped -78.25% vs AAL's -97.20%.
LUV currently has the higher Sharpe Ratio (1.29 vs 0.98), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.
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