Correlations, Risk Management

Today is Tuesday, July 5, 2022.

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Correlations, Risk Management

The use of correlations and risk management for investing are discussed by Mike Kelly, the founder of Investment Science, in a new episode of the Early Bird podcast.

All Together: Most financial instruments move together and correlate because of the creation of exchange-traded funds (ETFs), Kelly said.

Tips: Kelly said that investors should always invest in what they know, and avoid putting everything in one asset class.

Optional: The problem with options trading among retail investors is that they may overuse them and it can be risky, Kelly said.

Final Thoughts: How should retail investors use correlations in 2022? Find out by listening to a new episode of the Early Bird podcast.


Notable Earnings Today: N/A.

Notable IPOs Today: Enhabit, Inc. (NYSE: EHAB).

Notable Equity Crowdfunding Campaigns Ending Today: Trini Vybez (SMBX), Kravegan (Honeycomb), Better Bean (SMBX), OptioLend (StartEngine).

Notable Economic Events Today: Factory Orders (10:00 a.m. ET).

Flight Delays Ruin July Fourth Travel

Photo by Emanu / Unsplash

There were thousands of flight delays and cancellations over the July Fourth weekend, a signal for what’s potentially to come for passengers and airline stocks this summer.

Details: Over 1,700 flights were canceled on Sunday, with another 23,000 flights delayed, according to the flight tracking tool FlightAware. On Monday, there were 1,800 flight cancellations and another 22,000 were delayed.

Background: Air travel, which suffered greatly during the pandemic, has seemingly returned close to normal. The Transportation Security Administration screened over 6 million people over the weekend, which is close to pre-pandemic levels, according to CBS News. Friday had the most single-day screenings since the start of the pandemic.

The Problem: This weekend’s flight delays can be attributed to factors such as weather and a potential scheduling gitch within the platform used by American Airlines (Nasdaq: AAL). But the biggest culprit seems to be staffing shortages. On the Thursday before the holiday weekend, pilots with Delta Air Lines (NYSE: DAL) protested due to contract negotiations.

Numbers: It’s been a bad year so far for airline stocks. Delta is down 26% and American Airlines is down 29%. United Airlines Holdings (Nasdaq: UAL) declined 19% while Southwest Airlines (NYSE: LUV) fell 16%. Meanwhile, Alaska Air Group (NYSE: ALK) dropped by 23% and JetBlue Airways (Nasdaq: JBLU) decreased by 41%.

Final Thoughts: If these flight delays persist during the busy summer travel season, that could be bad for passengers and for shareholders in these airline stocks.

Equity Crowdfunding Spotlight: Fourplay Social

Briefly describe your business. Fourplay is a social network for single friends. Users team up, create a shared profile, and then match with other pairs, because double dates are the more fun, lower pressure, and safer way for singles to meet.

What are the terms of the investment for your campaign? Fourplay Social is raising a $1MM pre-seed via SAFE documents with a 20% discount and $8MM cap. The minimum check size from accredited investors is $25,000. Non-accredited investors can invest via the equity crowdfunding campaign on Wefunder.

What makes your startup special? Why will it succeed? Fourplay has early feedback (4.5/5 stars in the App Store), early traction (14,000 users in the greater NYC region without any formal advertisements), and the demand (a waitlist of over 12,000 people) that clearly demonstrates product-market fit.

Trends to Watch

Sorry Bored Ape: NFT sales plummet more than 90% to 12-month lows (The Independent)

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