Let’s say you have a pair of securities X and Y that have some underlying economic link, for example two companies that manufacture the same product like Pepsi and Coca Cola.
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Pairs Trading using Data-Driven Techniques: Simple Trading Strategies Part 3ample of a strategy based on mathematical analysis. We’ll demonstrate how to leverage data to create and automate a pairs trading strategy. Download Ipython Notebook here . Underlying Principle <span>Let’s say you have a pair of securities X and Y that have some underlying economic link, for example two companies that manufacture the same product like Pepsi and Coca Cola. You expect the ratio or difference in prices (also called the spread) of these two to remain constant with time. However, from time to time, there might be a divergence in the spread be Summary
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