LUV (LUV)
Daily ERM3 factor decomposition: how much of LUV's variance is explained by the market, its sector, and its subsector — and the ETF notionals that would neutralize each layer.
- Price
- $45.38
- Market cap
- $22.6B
- 23-day vol
- 33.4%
- Sector proxy
- XLI
- Subsector proxy
- IYT
Risk DNA
34% of LUV's variance is systematic (explainable by market, sector, and subsector factors); the rest is stock-specific.
Market 16.1%Sector 6.2%Subsector 11.9%Stock-specific 65.8%
ETF hedge ratios
Dollars of ETF to short per $1 of LUV held — executable hedge weights, not regression betas. L1 hedges market only; L3 adds sector and subsector layers.
| Level | Market (SPY) | Sector (XLI) | Subsector (IYT) | Explained risk |
|---|---|---|---|---|
| L1 | $-1.51 | — | — | 16.1% |
| L2 | $-0.47 | $-1.11 | — | 22.3% |
| L3 | $-0.18 | $-0.20 | $-1.18 | 34.2% |
Data as of July 28, 2026. Updated daily from the ERM3 pipeline.
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