Correlated Stock Pair FORD v. GOODYEAR: Wild Card! March Trade of the Month


$796 in 8 Market Days on $2,000 Margin. 40% Return!

We are highlighting a member of our new FAST 50 U.S. Equities Pairs launched in February 2022 as our correlated stock pair trade of the month for March.Ford Motor Company (NYSE: F) vs.The Goodyear Tire & Rubber Company (Nasdaq: GT). The latest live trade called on 7 March 2022 didn’t disappoint, delivering $796 Net Profit and a 40% return on margin in 8days, based on $5,000/leg position size.

Video: Pair Trade of the Month March 2022

Finding a Correlated Stock Pair to Trade: Backtesting with PairTrade Finder® PRO

Welcome to the Wild Card! We’ve added some pairs to our latest FAST 50 U.S. Equities Pairs vintage that don’t meet all our correlation and cointegration filters but that have EXCEPTIONAL looking in-sample backtests over the last two years. We call these WILD CARDS and we think they bear further study of their signals.

In backtesting over the two years prior to 1 February 2022, our WILD CARD PAIR F/GT delivered five closed trades, a 100% win rate, a 21% CAGR, a small 9% Max Drawdown, an average net profit per trade of $290, and over $2,400 in total profits, all based on only $5,000/leg position size:

correlated pair trade

Live Signal Trade Result

In live trading, F/GT called an Entry Signal EOD on 7 March 2022 at a +2.77sd of the Ratio compared to the 60-day Moving Average of the Ratio. The trade exited on 17 March 2022, eight market days later at a +0.90sd, delivering a $796 Net Profit and a 40% return on margin! (assumes $5,000/leg trade size and 5:1 CFD margin, illustrative):

correlated stock pair

PairTrade Finder®’s FAST 50 U.S. Equities Pairs & Correlated Stock Pair Trade Signals

At PairTrade Finder®we analyse over 2,200 U.S. equities to find you the best USA stock pairs to trade. That is your first trading checklist – we do all the hard work for you! We update this analysis on a quarterly basis to ensure these pairs stay fresh and their correlations and cointegrations strong to offer you the highest-probability setups.

Then, with these great pairspre-loaded into your 24/7 market radar Watchlist, you will receivelive trading signalsdirectly on-screen and by email. You can then semi-autotrade these signals directly into Interactive Brokers’ Trader Workstation® for easy execution.

What filters do we use? Here’s the list:

  • USA (NYSE/NASDAQ/AMEX): > than $2 bln mkt cap (most much larger), > $2 million/day of avg. daily traded volume($)
  • Easy-to-borrow (depending on broker)
  • Similar fundamentals: same market, same sector, usually same industry sub group. Beta-similar, market-cap-similar pairs
  • Backtested with a +/-2.7 standard deviation Entry Stretch, +/-1.0 standard deviation Exit Stretch
  • Two-year backtest period, Stretch & Ratio Moving Average set to 60-day lookbacks
  • COINTEGRATION: We select only pairs with a p-value of 0.10 or less over the last 18 months or so
  • AVG. CORRELATION: of minimum 50%, preferably higher over the two-year period
  • Minimum Average Profit per Trade of $200, preferably $250+ (based on $5,000/leg)
  • Compound Annual Growth Rate of Net Profits for each pair preferably in excess of Maximum Drawdown % i.e. positive reward/risk
  • Maximum historic drawdown < 20%, preferably <15% (before leverage)
  • Win Rate at least 70%
  • Maximum Days in Trade of 50 days. This setting represents our time stop. Average trade duration is around 12-15 days

The Trading Checklist, or “Cheat Sheet”

Once you receive a live pair trade signal fromPairTrade Finder® PRO, we then apply the Trading Checklist Cheat Sheet. It contains 12 elements to review to ensure you are choosing the highest probability setups to trade. The video above shows you what it’s all about.

How Can I Get Started?

Subscribe today and receive a 15-Day Free Trial of PairTrade Finder® PRO with these FAST 50 U.S. Equities Pairs PRELOADED into your Watchlist. PTF PRO will immediately begin generating live trading signals from these pairs for your further review!

We also provide you with our acclaimed 4-HOUR, 13-LECTURE PAIR TRADING VIDEO TRAINING COURSE taught by professional pair traders. In it you will learn how to use our great software to easily backtest for the best correlated stock pairs, filter trading signals for entry, apply sensible position sizing and trade management techniques, and manage a portfolio. These videos will help to give you a great shot at reaching consistent profitability in your trading.

Find out all about it at www.pairtradefinder.com

Happy trading.

Geoff, Paul & The PairTrade Finder® Team

NB: The FAST 50 example pair trades in PairTrade Finder® PRO and the trading signals generated therefrom are provided for informational and educational purposes only. They should not be construed as personalised investment advice. It should not be assumed that trading using the parameters demonstrated by the Software will be profitable and will not result in losses. Please see our full Terms & Disclaimer here.

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