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What is Pair Trading?

A market neutral trading strategy enabling traders to profit from virtually any market conditions. The strategy monitors performance of two historically correlated securities. Pairs trading strategy demands good position sizing, market timing, and decision making skill.

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Is Pair Trading Risky?

Pair Trade takes advantage of the deviation in valuation of stocks due to the dynamic nature of the market. Key to spreading the risk is an assumption that the pair will have similar business idea as in the past during the holding period of the stock and will return to historic average levels.

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What Is The Rate of Return?

Pair trading returns are dependent on availability of opportunities for profiting and quick reactions to take advantage of the deviation. It is common to see 5 - 10% returns within weeks. The returns largely depend on excellence in statistical and market research by the trader / advisor.

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How To Start Pair Trading?

Pair trading with futures requires sufficient capital to hold a pair, a trading account with a brokerage firm, and pair trading analysis tools. An advisor can help you set-up and achieve high returns on your capital with scientifically processed trade advise.

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What is Pair Trading?

Written by PairTrade

The pairs trade or pair trading is a market neutral trading strategy enabling traders to profit from virtually any market conditions: uptrend, downtrend, or sideways movement. This strategy is categorized as a statistical arbitrage and convergence trading strategy. The pair trading was pioneered by Gerry Bamberger and later led by Nunzio Tartaglia’s quantitative group at […]

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Terms used in Pair Trading

Written by PairTrade
Terms used in Pair Trading

Certain Terms/Abbreviations are used in Pair Trading.  Find below some of the important terms used on this site.   Price Ratio (PR) Price Ratio is calculated by dividing the price of the first stock by the second. Mostly by High value stock by Low value stock Example: KOTAKBANK-HDFCBANK pair PR = HDFCBANK / KOTAKBANK 1394.05/804.7 = 1.7324 […]

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