I would assume that this is possible. Does anybody here actually do it. Are there enough of ETF out there to find correlative pairs.
Merry X-mas everyone.
Merry X-mas everyone.
Pairs trading ETFs
- Thread starter lowhangingfruit
- Start date
Quote from lowhangingfruit:
I would assume that this is possible. Does anybody here actually do it. Are there enough of ETF out there to find correlative pairs.
Merry X-mas everyone.
i trade a few ETF's to ETFs and a few ETFs to regular stocks...
But have very few trading samples that i have done so i have no comment on pairing with them..
good luck...
Go to this website...http://www.market-topology.com/
Register (Its free for now)... once registerd...
Go to the Correlations page... after registration...
http://www.market-topology.com/index.php?option=com_impactopia&view=friend&Itemid=2
Put in an ETF and see all the other ETF's and other regular stocks that are correlated to it..
Use the Top / Bottom Pairs area to do similar actions..
you will drown in available combos...
HTHelps...
HAVE STOP <img src="http://www.enflow.com/p.gif"> WILL TRADE
Thanks for the tip.
Yes there are plenty of highly correlated ETF pair combinations, however the profits are small because of the turtle-like movements in most of them, you need high leverage to make it worthwhile, stock pairs offer far higher profit opportunities. Ive attached backtest results for a handful of popular ETF's to illustrate the point, trades are based on 10k of stock purchased each side, you can see that profit per trade actually increases with the lower correlated pairs.
Registered: May 2004
Posts: 676
New Post 12-25-08 09:26 PM
Yes there are plenty of highly correlated ETF pair combinations, however the profits are small because of the turtle-like movements in most of them, you need high leverage to make it worthwhile, stock pairs offer far higher profit opportunities. Ive attached backtest results for a handful of popular ETF's to illustrate the point, trades are based on 10k of stock purchased each side, you can see that profit per trade actually increases with the lower correlated pairs.
Thanks for the help. How do you like the pairs search software. I've been thinking about testing it.
Posts: 676
New Post 12-25-08 09:26 PM
Yes there are plenty of highly correlated ETF pair combinations, however the profits are small because of the turtle-like movements in most of them, you need high leverage to make it worthwhile, stock pairs offer far higher profit opportunities. Ive attached backtest results for a handful of popular ETF's to illustrate the point, trades are based on 10k of stock purchased each side, you can see that profit per trade actually increases with the lower correlated pairs.
Thanks for the help. How do you like the pairs search software. I've been thinking about testing it.
Yes pairtrade finder is good, ive been using it in my journal and making great returns http://www.elitetrader.com/vb/showthread.php?s=&threadid=134253