| Category | Pairs | KeyDrivers |
|---|---|---|
| Semiconductor | AMD (AMD) vs. NVIDIA (NVDA) | GPU/CPU Demand & AI Adoption |
| Cloud Computing | Microsoft (MSFT) vs. Amazon (AMZN) | Cloud Computing Growth & Enterprise IT Spending |
| Auto Parts Retail | AutoZone (AZO) vs. O’Reilly (ORLY) | Auto Repair Market & DIY Trends |
| Banking | JP Morgan (JPM) vs. Bank of America (BAC) | Interest Rates & Loan Growth |
| ETF Strategy | Nasdaq ETF (QQQ) vs. Semiconductor ETF (SMH) | Technology Sector Performance |
| Oil & Gas | Exxon Mobil (XOM) vs. Chevron (CVX) | Oil Prices & Global Energy Demand |
| Home Improvement | Home Depot (HD) vs. Lowe’s (LOW) | Housing Market & Home Improvement Spending |
| Telecom | AT&T (T) vs. Verizon (VZ) | Wireless Subscriptions & 5G Adoption |
| Payment Processing | Visa (V) vs. Mastercard (MA) | Consumer Spending & Digital Payments |
| Beverage | Coca-Cola (KO) vs. PepsiCo (PEP) | Beverage Market Share & Pricing Power |
| Fast Food | McDonald’s (MCD) vs. Yum! Brands (YUM) | Fast Food Consumption & International Expansion |
| Streaming | Netflix (NFLX) vs. Disney (DIS) | Streaming Subscribers & Content Investment |
| Retail | Walmart (WMT) vs. Target (TGT) | Consumer Retail Spending & E-commerce Growth |
| Airlines | Delta (DAL) vs. United Airlines (UAL) | Travel Demand & Fuel Costs |
| Social Media | Meta (META) vs. Snap (SNAP) | Digital Advertising & User Engagement |
Pairs Trading Strategy Overview
Team Members: Sunny Zhang, Victoria Li, Jackie Xi
Pairs Trading Strategy Overview
Pairs Trading is a market-neutral strategy designed to profit from temporary price divergences between two historically correlated assets. Rather than betting on market direction, it aims to capture statistical arbitrage opportunities when the price relationship between two assets temporarily drifts from its historical mean.
This strategy offers a robust approach in volatile markets, by:
- Targeting mean reversion in asset pairs
- Utilizing long-short positions to hedge market-wide movements
- Focusing on relative pricing rather than absolute market trends
By identifying pairs that move together historically, the strategy capitalizes when their prices diverge and then revert — creating opportunities for low-risk, data-driven trading.
Sample Trading Pairs Table
Explore This Project
- About: Learn the motivation, design, and logic behind the strategy
- Indicators: Statistical indicators, trading signals, and performance metrics
- Sample pairs: Sample pairs, backtesting results, and insights
“ In markets driven by noise, we trade on the signal. ”