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TSLA sensitivity to overall market

DonPedro

Member
Mar 28, 2013
688
1
Oslo, Norway
I don't think that TSLA is very sensitive to general market movement. But would people agree that there is some sensitivity? (I assume this can be investigated numerically by some sort of co-variance analysis, but I don't have the opportunity to do that).

I am asking because I am considering shorting one of the main indices, and part of that consideration is whether it could hedge the TSLA investment to some degree.
 

Strong887

Member
Apr 12, 2013
6
0
Long Island
I don't think that TSLA is very sensitive to general market movement. But would people agree that there is some sensitivity? (I assume this can be investigated numerically by some sort of co-variance analysis, but I don't have the opportunity to do that).

I am asking because I am considering shorting one of the main indices, and part of that consideration is whether it could hedge the TSLA investment to some degree.


I am long TSLA , short SPY from 158.2 -- since TSLA is not part of the index, its momentum should really have little bearing on S&P unless there is just a major correction under way , which i do not see... a 3-5% pullback on S&P should do next to nothing since there is a essentially a put under TSLA common by way of the large short interest.
 

DonPedro

Member
Mar 28, 2013
688
1
Oslo, Norway
Then we have the same position. Short SPY from 158.6 here. :)

What I meant was more that if SPY in general pulls back significantly, that is typically because of general negative sentiment about economic outlook, corporate profits, consumer confidence and so forth. All these factors probably affect TSLAs business to some extent as well. Long TSLA is a position regarding its absolute performance. Add a short position in the general market, and your total position is simply for TSLA to outperform the rest.
 

kenliles

Active Member
Jun 7, 2012
3,060
8,356
TSLA does some tracking and often will even exaggerate market moves by my observation, but I've found this to be unusually 2nd derivative in frequency behavior. In fact, I decided to trim TSLA long options by 30% in anticipation of its decline with a market pullback. Got some market pullback, but TSLA did not follow. Big mistake , I never really found a place recover that error. That's just one recent example, but Ive learned the correlation is far too inconsistent to assign a normal derivative effect. For me it's a distant tie breaker behind most other factors of buy/sell decisions
 

DonPedro

Member
Mar 28, 2013
688
1
Oslo, Norway
The correlation coefficient between the SP500 and TSLA is about 0.45 counting since jan 1 2011 until today.
Wolfram alpha gives you some of the values that you might want where you can change the time span from a drop down menu on the upper right of each section.
http://www.wolframalpha.com/input/?i=tsla

Great post, thanks!

Wolfram Alpha ftw. Try to ask it "what is the answer to life" or "what is the sound of one hand clapping" :)
 

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