Pairs Trading

[whself beginner]

Hello,

today i played with my currencies in excel and jmp to create a correlation for pairstrading (simple rising for long and falling for short). after this i built a strategy with strategyplot to visualize the correlation r from 2 currencies ... in chart.

for interested see pic and source ... at the first simple algo / logic ...

best regards
wh

[datahogg]

Correlation is more complicated than just up vs down. Refer to a statistics
source for the formula.

[cmphil]

Yeah you really can't do pair trading properly without heavy statistical analysis. It's also really tough to find good tools that are free online where you can get this type of data.

I did find one, however, at Catalyst Corner which lets you input 2 securities and outputs tons of data.

Here's a link if anyone is interested (XOM, long BP, short): http://catalystcorner.com/index.php?...employed=10000