You can then draw two price curves -- one for Tesla and one for NASDAQ.
Paweł Łaskarzewski, who’s indifferent as to bull or bear markets, shares an example of two assets that are correlated in price action. “Tesla goes in the same direction as NASDAQ,” he says. You can then draw two price curves -- one for Tesla and one for NASDAQ. “If the spread between them is growing, we can make money on the spread. We don’t care if it’s going up or down.” That same principle can be used for the forex market (such as the spread between the U.S. Dollar and Euro) or in crypto, such as the spread between Bitcoin and something like Solana or BNB.