Enterprise Feature
This feature is available on the Enterprise plan. The documentation below describes its full capabilities so you can evaluate whether it fits your workflow. Contact us to learn more about upgrading your access.
Overview
Pairs Trading is a statistical arbitrage tool that identifies pairs of stocks with historically correlated price movements. When the spread between paired stocks deviates from its historical norm, it generates signals to trade the convergence back to the mean. This is a market-neutral strategy that can profit regardless of overall market direction.
Tabs
Automated pair discovery using cointegration tests, correlation analysis, and sector grouping. Finds the best candidate pairs from the stock universe.
- -Cointegration test results (p-values)
- -Correlation coefficients
- -Half-life of mean reversion
- -Sector and industry pair grouping
Active trading signals for discovered pairs. Shows when spreads have deviated significantly from their historical mean.
- -Z-score of current spread (deviation from mean)
- -Signal direction (long/short the spread)
- -Entry and exit thresholds
- -Signal strength and confidence
Detailed spread analysis for a selected pair including historical spread chart, Z-score visualization, and statistical properties.
- -Historical spread time series chart
- -Z-score overlay with entry/exit bands
- -Rolling correlation and cointegration stability
- -Spread distribution histogram
Backtested trade history for pair strategies showing completed round-trip trades, P&L, and aggregate performance statistics.
- -Round-trip trade log with entry/exit dates and prices
- -Per-trade and cumulative P&L
- -Win rate, average hold time, profit factor
- -Equity curve and drawdown analysis
Key Concepts
| Concept | Description |
|---|---|
| Cointegration | Statistical property where two price series maintain a stable long-run relationship even if they wander individually |
| Spread | The price difference (or ratio) between the two paired stocks |
| Z-Score | Number of standard deviations the spread is from its historical mean |
| Half-Life | Expected time for the spread to revert halfway back to the mean (shorter is better) |
| Mean Reversion | The tendency of the spread to return to its historical average after deviating |
How to Use
- ●Start with the Discovery tab to review pre-screened pair candidates
- ●Focus on pairs with low cointegration p-values (below 0.05) for statistical reliability
- ●Check the Signals tab for pairs currently showing trading signals
- ●Use the Spread tab to visualize the current spread condition for a specific pair
- ●Review History for backtested performance of the pairs strategy
Warning
Combining with Other Tools
- ●Use Factor Intelligence to find stocks with similar factor profiles as pair candidates
- ●Cross-reference pair signals with Market Regimes — mean reversion strategies work best in sideways/low-vol regimes
- ●Check Fundamental Ranking for both stocks in a pair to understand if the spread deviation is fundamentally justified
- ●Use the Chart page to visually inspect the spread and confirm the statistical signals
This platform provides data and analysis tools for educational and informational purposes only. Nothing on this platform constitutes financial advice, investment recommendations, or solicitation to buy or sell any securities. Always conduct your own research and consult with a qualified financial advisor before making investment decisions.