Historical data analyzed by CNBC Pro suggests a strong correlation between the performance of Tesla shares and seven diverse S&P 500 stocks. These include:
- Juniper Networks: Cybersecurity and networking innovator
- Seagate Technology: Leader in digital storage solutions
- Tyler Technologies: Developer of specialized software applications
- Regeneron Pharmaceuticals, Vertex Pharmaceuticals, Illumina: Renowned names in the pharma and biotech sectors
- IDEXX Laboratories: Leading provider of pet healthcare products and services
Interestingly, despite the tumultuous start to 2024 for Tesla (whose shares have seen a decline of over 30%), these correlated stocks have remained relatively stable or experienced only modest drops. This resilience caught the eye of market observers, especially with Tesla’s recent after-hours surge triggered by CEO Elon Musk’s comments on accelerating the production of more affordable EV models. The announcement came even as the company reported a first-quarter revenue drop and missed analyst estimates, underscoring its ongoing challenges in the face of price cuts.
Correlation Versus Causation
It’s crucial to remember that past correlations don’t necessarily guarantee future performance. One of our analysts highlights that these identified correlations offer intriguing insights into market dynamics but shouldn’t be mistaken for a roadmap to surefire returns.
Understanding the Correlation
While pinpointing the exact reasons for this correlation requires deeper analysis, several factors could be at play. Some analysts link this to sector-wide trends and the increasing influence of technology on diverse industries. Others posit that investor sentiment and risk appetite might play a role. These stocks could be viewed as comparatively safe-haven options within the S&P 500, especially during periods of volatility in the broader tech sector.
Analyst Outlook
FactSet data indicates varying upside potential for the listed stocks, implying a spectrum of opinions within the analyst community. Some analysts likely see them as beneficiaries of long-term trends like digitalization and increased spending in sectors like healthcare and cybersecurity. Others might adopt a more cautious approach, highlighting potential headwinds in the current economic climate.
