Tag Archives: Pair Trading Software

Stock Pair Trading the Top 30 Nov 2020 Vintage: First Five Weeks’ Results

For those of you who are new to this site, stock Pair Trading involves simultaneously entering LONG (i.e. BUYING) and entering SHORT (i.e. SELLING) two “paired” stocks.

stock pair trading

Why Pair Trade Stocks?

Stock Pair Trading has been shown to provide protection from market crashes, controlled risk, low correlation to the market averages and ability to generate significant and consistent returns.  Multiple recent research studies have demonstrated returns to be in the range of 2%-4% per month*, on a 4:1 leverage basis, over more than a decade.

Add in the use of Cointegrated Stock Pairs and the historical returns look even stronger**.

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EXAMPLE PAIR TRADE OF THE MONTH SEPT 2020

LCI Industries Inc. (LCII:NYSE) vs. Polaris Inc. (PII:NYSE) September was a good month for the signals generated by the August 2020 Vintage of our Top 30.   As an example pair trade, we want to drill down on a pair that has consistently delivered profitable trades over the last year, that of LCI Industries Inc. (LCII:NYSE) vs. Polaris Inc. (PII:NYSE).  The latest trade called on the pair didn’t disappoint, delivering $578 Net Profit and a 15% return on margin in 4 days.  Here is a detailed trade entry and exit analysis for this example pair trade: Video: Pair Trade of the Month Sept 2020

example pair trade

Backtest Results:

In backtesting over the three years prior to 24 August 2020,

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Cointegrated Stock Pairs: Top 30 August Vintage Post a Perfect Record in First Three Weeks of Live Trading Out-of-Sample

Cointegrated stock pairs

Pair Trading stocks involves simultaneously entering LONG (i.e. BUYING) and entering SHORT (i.e. SELLING) two “paired” stocks.  It has been shown to provide protection from market crashes, controlled risk, low correlation to the market averages and ability to generate significant and consistent returns.  Multiple recent research studies have demonstrated returns to be in the range of 2%-4% per month*, on a 4:1 leverage basis, over more than a decade.  Add in the use of Cointegrated Stock Pairs and the historical returns look even stronger**.

PairTrade Finder® PRO’s Top 30 Cointegrated Stock Pairs

But we prefer to put our money where our mouth is. 

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Stock Pair Trading System: Use It to Profit In Uncertain Times

Life Interrupted?

The recent life interruptions occurring for millions of people worldwide have left many at-home with too much free time.  Are you wondering how to re-deploy your time and energy to meet your personal and financial goals?  Is one of your goals is to develop a second or multiple income stream to allow you diversify away from reliance on a job (or a lack thereof)?  If so, we believe we can be of value-add.  Why not take the time with us to learn our acclaimed and proven stock pair trading system?

stock pair trading system

Our Stock Pair Trading System The stock pair trading system embedded in PairTrade Finder® PRO allows retail traders to easily learn and use a proven hedge fund strategy.  Read More →

Stock Pair Trading Through a Market Crash: Generate Consistent Profits

Stock Market Volatility Returns with a Vengeance

Last week in the U.S. Equities indices was certainly the definition of “interesting times”.  The DJIA crashed by over 1,800 points or 6.9% on Thursday, only to recover about 1.9% on Friday.  The S&P 500 behaved similarly.  The NASDAQ was a bit less volatile, but we think it’s saving up for a chance to really out-do the others.  Quite some volatility.  However, for many of our clients, it was an excellent opportunity to generate increased profits by stock pair trading through a market crash.

stock pair trading through a market crash

Market Volatility Has Been Shown to Increase Pair Trading Returns

We predicted this continuing volatility in our earlier blog post in April of this year. 

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Best Trading Strategy for Lockdown Volatility?

What is the best trading strategy for highly volatile markets?  The results of our Top 30 U.S. Equities Pairs over the last four months would suggest U.S. equities pair trading.  If you had been trading the unfiltered trading signals from our Top 30 U.S. Equities Pairs, as updated, from 12 November 2019 until 1 April 2020, these generated an almost 30% return on account equity.  The S&P 500 returned -19.5%.  That’s almost 50% alpha in 4.5 months.  Detailed results are here and here.

best trading strategy

The results of our research and development to create the Top 30 and to level up the power of our stock pair trading platform PairTrade Finder® PRO are very encouraging. 

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Best Pair Trade of the Month: March 2020

Avis Budget Group Inc. (CAR:NASDAQ) vs. United Rentals Inc. (URI:NYSE)

$6,983 in 3 Market Days, 175% Return on Margin.  Best pair trade for the month of March 2020!

We selected CAR/URI to form part of our updated Top 30 U.S. Equities Pairs for the 1 March 2020 vintage.

Best Pair Trade

Backtest Results:

In backtesting over the three years prior to 1 March 2020, cointegrated and correlated stock pair CAR/URI delivered 5 closed trades, a 100% win rate, an average net profit per trade of $906, and over $4,700 in total profits:

Best pair trade

Actual Trading Result

In actual trading,

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Top Pair Trade of the Month: February 2020

Top Pair Trade: W.R. Grace vs. Olin Corporation delivered a 100% win rate on 8 pair trades over the last 3 years in backtesting.  Its CAGR% was over 17% and Maximum Drawdown was 5%, over 3:1 reward/risk. Latest live trade ends in profit of $1,150 in 7 market days, for 28% Return on Margin! (Based on $10k/leg and 5:1 CFD margin.) Watch our trade analysis video here. Top Pair Trade

Happy pair trading.

Geoff, Paul & The PairTrade Finder® Team

NB: The Top 30 example equities pairs in PairTrade Finder® PRO and the trading signals generated therefrom are provided for informational and educational purposes only. 

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Pair Trading Results: Trade of the Month November 2019

PairTrade Finder® PRO Top 30 US Equities Pairs Fair Isaac Corporation (FICO:NYSE) vs. Q2 Holdings Inc. (QTWO:NYSE)

Entry on 5 November 2019 at +2.65 sd.  Exit on 20 November 2019 at +0.57 sd.

$1,107 in 16 Days

28% Return on Margin

(based on $10,000/leg and 5:1 CFD leverage)

WATCH OUR EQUITIES PAIR TRADE VIDEO:

Pair Trading Results

Get Started Today Generating Pair Trading Results!

With PairTrade Finder® PRO, we promise to help make you a consistently profitable equity pairs trader within 30 days. 

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How a Stock Trading System Costing Under $2/Day Can Help Deliver Consistent Profits

PairTrade Finder® PRO, our acclaimed pairs trading software platform, encapsulates a stock trading system refined over more than 10 years.  We employ a hedge fund trading strategy that has been empirically demonstrated to be highly profitable over multi-decades on the S&P 500 (1), delivering between 1%-5% per month over the market return over more than 10 years.

Stock trading systems are useful to keep your emotions out of your buy and sell decisions.  And the trading legends will agree:

stock trading system

(Linda Bradford Raschke began her professional trading career in 1981 making markets in options as a member of two exchanges.

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