Zero Pair Calculator
Introduction & Importance
Zero pair trading is a market-neutral strategy that exploits temporary pricing discrepancies between two highly correlated assets…
How to Use This Calculator
- Enter the ticker symbols of two highly correlated stocks.
- Click ‘Calculate’.
- View the results and chart below.
Formula & Methodology
The core of the zero pair trading strategy is the calculation of the z-score…
Real-World Examples
Let’s consider three case studies: AAPL vs MSFT, GOOGL vs AMZN, and FB vs TWTR…
Data & Statistics
| Period | Win Rate | Average Profit |
|---|---|---|
| 2015-2020 | 65% | $1,200 |
| 2020-2022 | 58% | $1,500 |
Expert Tips
- Use a stop-loss to manage risk.
- Consider transaction costs in your strategy.
- Regularly review and update your pairs.
Interactive FAQ
What is the optimal holding period?
There’s no one-size-fits-all answer. It depends on the specific stocks and market conditions.
How do I know when to close a position?
Close the position when the z-score returns to zero or crosses a threshold you’ve set.