TMC is an independent, primarily volunteer organization that relies on ad revenue to cover its operating costs. Please consider whitelisting TMC on your ad blocker or making a Paypal contribution here: paypal.me/SupportTMC

TSLA sensitivity to overall market

Discussion in 'TSLA Investor Discussions' started by DonPedro, Apr 29, 2013.

  1. DonPedro

    DonPedro Member

    Joined:
    Mar 28, 2013
    Messages:
    687
    Location:
    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.
     
  2. Strong887

    Strong887 Member

    Joined:
    Apr 12, 2013
    Messages:
    6
    Location:
    Long Island

    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.
     
  3. DonPedro

    DonPedro Member

    Joined:
    Mar 28, 2013
    Messages:
    687
    Location:
    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.
     
  4. kenliles

    kenliles Active Member

    Joined:
    Jun 7, 2012
    Messages:
    1,823
    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
     
  5. Bearman

    Bearman Member

    Joined:
    Nov 17, 2011
    Messages:
    363
    Location:
    Sweden
    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
     
  6. DonPedro

    DonPedro Member

    Joined:
    Mar 28, 2013
    Messages:
    687
    Location:
    Oslo, Norway
    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" :)
     

Share This Page