New Service Finds and Ranks Profitable Pairs Trading Opportunities

Share Article

Pairs Trader, a startup in Chicago, is unveiling its platform for financial traders to find and evaluate pairs trading opportunities.

Pairs Trader is unveiling its platform for financial traders to find and evaluate pairs trading opportunities.

Pairs Trader is unveiling its platform for financial traders to find and evaluate pairs trading opportunities.

Pairs Trader tracks over 100,000 paired combinations and ranks prospective trades by expected performance

Pairs Trader, a startup in Chicago, is unveiling its platform for financial traders to find and evaluate pairs trading opportunities. A pairs trade is created by buying one asset and selling another at the same time. The assets involved typically share a similar risk profile, so as prices change the trader’s value doesn’t change too much. The goal is to find two related assets whose relative pricing relationship has diverged from the long-run mean and profit as the relative prices revert back.

“Hedge funds do this sort of thing all the time,” says Alan Illing, founder of Pairs Trader. Traders outside of large institutions have trouble executing this strategy because of the sheer number of combinations to consider. There are 5,000 pairs to consider among 100 assets, and half a million among 1,000 assets.

Historically traders have largely ignored all these possible combinations, instead focusing on a handful of well-known pairs. For example commodities traders refer to the “crush spread” as the relative price relationship between soybean oil and meal futures and will trade it as prices diverge from their long-run relationship.

Pairs Trader tracks over 100,000 paired combinations and ranks prospective trades by expected performance. The ranking algorithm is empirically driven by historical performance. Trades whose statistical attributes match historically profitable performers are ranked above those matching weaker trades.

About Pairs Trader: Founded in 2016, Pairs Trader is on a mission to make cutting edge statistical arbitrage accessible to traders of all walks of life. It combines technology and research to help traders analyze opportunities and plan entry and exit points to maximize profitability. The platform is currently focused on pairs among Exchange Traded Funds (ETFs) and plans to introduce more asset classes over time.

For more information, please visit http://www.paristrader.com.

Alan Illing                        
Pairs Trader
press(at)pairstrader(dot)com

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Alan Illing
Pairs Trader
+1 (773) 830-4221
Email >

Alan Illing
@PairsTraderApp
since: 08/2013
Follow >
Visit website