Overview


Pair trading is a market neutral, mean reversion strategy that focuses on trading two instruments against each other and profiting from changes in the spread between the two.

Finding stocks that are suited to being traded as a pair involves a rigorous statistical analysis of their past price movements as well as any fundamental relationships that may exist between the two.

Just because two stocks happen to be in the same industry, does not necessarily mean they are viable candidates for pair trading.

Pair trading takes market direction out of the equation by focusing instead on the relative relationship (ie: spread) between stocks and therefore makes this a valuable addition to a purely directional portfolio.

DiversifyPortfolio makes the process of finding viable pair trading candidates easy by performing the necessary cointegration and correlation analysis for you over multiple time frames. The resulting metrics and charts are presented in an intuitive and understandable format.

Features


Find stocks that are statistically suited to pairs trading.


Combine cointegration, correlation and linear regression testing.


Analyze pairs using traditional techniques such as Z-Score as well as new ones like the Stress Indicator.


Use the Stress Indicator originally developed by Perry Kaufman to identify divergences in the relative spread between stocks.


Add pairs to your watchlist to view and keep track of all their relevant statistics.

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