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What makes Tesla such a good indicator for the s&p500? Is it down to its the weighting in the index? Do any other stocks have the same/similar standing in the s&p500 with regards to seeing what it might do?

Cheers Fed. Happy Easter

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I mean the weighting of Tesla is only 2.2%, its the fourth highest weighting after AAPL MSFT AMZN. I guess it has some reason behind it. I mentioned the correlation coefficient in the Portfolio Construction Pt 2. The correlation coefficient between TSLA & SPY from April 2020 to the present is 0.92 which is strong. It's difficult to explain. It is just correlation that has strengthened more and more.

The other top weightings obviously have high weightings. Out of those three the only one I monitor continuously is AAPL.

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Cheers for that. I've not got round to reading pt 2 portfolio construction yet as I'm on holiday but looking forward to catching up whilst on the sun lounger tomorrow!

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