The Skinny on Quantitative Finance - January 29, 2021 - Structuring a Pairs Trade
Pairs trading is a classic strategy that trades a pair of instruments which share some underlying economic link.This strategy is profitable when the spread between the pair mean reverts following a significant divergence from its long-term performance, and this strategy can be enhanced using many of the concepts we’ve discussed in this series. Join Tom, Tony and Julia as they discuss one way we can structure a pairs trade using techniques from quantitative finance.
References for concepts used in this piece: