Pair Trade Idea: Long Airlines, Short Drillers

Is it fair to say that the airlines and oil drillers business models run opposite one another? Drillers want expensive crude to justify their projects and airlines want lower crude, so that jet fuel prices can drop and help them run a profitable business.

You can see how these two industries run counter one another in their share price performance, especially in July.

Here take a look.

Isn’t that fascinating? Go long airlines, short drillers in July and close out that trade in January. I haven’t run the historical numbers yet, but I bet it beats the tits off the SPY. All of these tools are available in Exodus.

Let’s take two stocks, one from each group, as an example: CLR and UAL.

Aside from 2011-2012, this trade minted money over the past decade.