Pair Trade Idea: Buy HAR/Sell GFI
Time Frame: Actually, quite short term - looking for a quick reversion to the mean and narrowing of the performance gap.
- Trading at lower boundary of 40-day 2 standard deviation Bollinger Band (BB)
- 5-day performance gap is wide as it sees GFI lower by 4.23% while HAR is lower by a larger 12.61%
- 250-day correlation above 80%
Suggested Trading Levels:
- Ratio: 0.3485 (current reading)
- Stop-loss: 0.3375
- Target: 0.3685 (near mid-point of BB)
A successful pair trade can be realized 1 of 3 ways:
The long position rises while the short position falls
The long position rises faster than the short position rises
The short position falls faster than the long position falls.
For more real-time insights and trade ideas, or if you're considering at alternative trading services provider, get in touch today.
- Trading at lower boundary of 40-day 2 standard deviation Bollinger Band (BB)
- 5-day performance gap is wide as it sees GFI lower by 4.23% while HAR is lower by a larger 12.61%
- 250-day correlation above 80%
Suggested Trading Levels:
- Ratio: 0.3485 (current reading)
- Stop-loss: 0.3375
- Target: 0.3685 (near mid-point of BB)
A successful pair trade can be realized 1 of 3 ways:
The long position rises while the short position falls
The long position rises faster than the short position rises
The short position falls faster than the long position falls.
For more real-time insights and trade ideas, or if you're considering at alternative trading services provider, get in touch today.
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