u/Aerhoespaceengineer

People say buy airlines before summer like its some obvious play. more people fly, airlines profit, stock goes up. right?

I actually tested this properly instead of just vibing about it

what I did

ran an event study (same methodology from academic finance) on 5 US airlines Delta, United, Southwest, American, JetBlue across 10 years (2015-2025, minus 2020 because covid breaks everything)

looked at the 20 trading days before June 1 each year and measured how much each stock moved vs what the S&P 500 would predict. so you're only seeing the airline-specific move, not just "the market went up"

market model is basic CAPM. fit a regression on 60 days of data before the window, then measure abnormal returns during the window. cumulative abnormal return (CAR) = the total excess move

results

the basket averaged -1.09% over the pre-summer window. lol

by airline:

• DAL: +0.30% (p=0.92)
• UAL: -0.54% (p=0.85)
• AAL: -0.86% (p=0.84)
• LUV: -1.97% (p=0.32)
• JBLU: -2.38% (p=0.24)

nothing is significant. 4 out of 5 airlines actually went DOWN relative to the market before summer. basket only had a positive CAR in 3 out of 10 years

2025 was a massive outlier at +12.5% which pulled the average up. without that its even worse

why this probably doesn't work

if summer seasonality was real and predictable, sell-side desks would have priced it in decades ago. also airlines are way more sensitive to fuel prices, rates, and macro than seasonal booking patterns. the CAPM strips out broad market moves but sector shocks still contaminate

also 10 years excluding covid is not a huge sample. you'd need a really strong effect to clear significance with that

what should I test next?

thinking about:

• do retail stocks actually pump before black friday
• do apple shares move after keynote events
• oil stocks around OPEC meetings
• does the pattern change if you split by years where fuel prices were falling vs rising

what theories do you want tested? the weirder the better

code is on github if anyone wants to check my work or run their own: github.com/jsabazova/hunchtest

not financial advice, past performance doesn't guarantee future results, I just like running regressions on things that don't matter

People says buy airlines before summer because more people fly, airlines profit, stock goes up. right? I actually tested this properly instead of just vibing about it

what I did

ran an event study (same methodology from academic finance) on 5 US airlines Delta, United, Southwest, American, JetBlue across 10 years (2015-2025, minus 2020 because covid breaks everything)

looked at the 20 trading days before June 1 each year and measured how much each stock moved vs what the S&P 500 would predict. so you're only seeing the airline-specific move, not just "the market went up"

market model is basic CAPM. fit a regression on 60 days of data before the window, then measure abnormal returns during the window. cumulative abnormal return (CAR) = the total excess move

results

the basket averaged -1.09% over the pre-summer window. lol

by airline:

• DAL: +0.30% (p=0.92)
• UAL: -0.54% (p=0.85)
• AAL: -0.86% (p=0.84)
• LUV: -1.97% (p=0.32)
• JBLU: -2.38% (p=0.24)

nothing is significant. 4 out of 5 airlines actually went DOWN relative to the market before summer. basket only had a positive CAR in 3 out of 10 years

2025 was a massive outlier at +12.5% which pulled the average up. without that its even worse

why this probably doesn't work

if summer seasonality was real and predictable, sell-side desks would have priced it in decades ago. also airlines are way more sensitive to fuel prices, rates, and macro than seasonal booking patterns. the CAPM strips out broad market moves but sector shocks still contaminate

also 10 years excluding covid is not a huge sample. you'd need a really strong effect to clear significance with that

what should I test next?

thinking about:

• do retail stocks actually pump before black friday
• do apple shares move after keynote events
• oil stocks around OPEC meetings
• does the pattern change if you split by years where fuel prices were falling vs rising

what theories do you want tested? the weirder the better

code is on github if anyone wants to check my work or run their own: github.com/jsabazova/hunchtest

not financial advice, past performance doesn't guarantee future results, I just like running regressions on things that don't matter