Monthly Archives: May 2017

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Tips on Setting Up My Watch List – Avoiding Industry and Single Stock Concentration

Your watch list will act as your home screen where you can evaluate pairs that have back tested through the Pair Trade Finder system.  After you have gone through the process of finding pairs to evaluate, back testing them, and adding them to the system, your pairs will be viewable on your watch list. There are a few important issues you should consider when developing a portfolio of stock pairs to watch, which include the number of specific industry pairs you should monitor, single stock concentration and how to anticipate a signal.

After you have gone through the process of finding companies that are in similar industries,

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The Mother of All ETF Pair Trades May Be Setting Up…

An interesting analysis from Goldman Sachs on the ETF’s with the highest concentration of funds in their top three constituents, and an ETF pair trade idea from Zero Hedge on how to arbitrage the resulting risk:


Pairtrade Finder

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Pair Trade COH Versus TJX

The Pairtrade Finder analytic generated a signal to purchase TJX Companies and Sell/short Coach.  Both companies are in the retaill space.  Coach surged on better than expected earnings, but is likely to run into resistance after climbing nearly 10%, as sales missed expectations.  TJX is scheduled to release its financial results in 2-week.  The watchlist shows the levels to enter the trade, as the stretch reached 2.7 standard deviations above the 100-day moving average.

The backtest of the two stocks shows that over the past 3-years 8-signals were generated with a stretch of 2.7 standard deviations for an entry criteria,

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