B bwolinsky Feb 8, 2013 #11 Quote from sungtaeyoo: This is very interesting. Which one should be better to long both QID/QLD or short both? Thanks. More... Shorting both is not a pairs trade. Short one, long the other is a pairs trade. With these instruments, all you have to do is go long the undervalued, or short the overvalued if you want. Or do half long under, short half over.
Quote from sungtaeyoo: This is very interesting. Which one should be better to long both QID/QLD or short both? Thanks. More... Shorting both is not a pairs trade. Short one, long the other is a pairs trade. With these instruments, all you have to do is go long the undervalued, or short the overvalued if you want. Or do half long under, short half over.
U ullas.tp Feb 9, 2013 #12 Quote from bwolinsky: Shorting both is not a pairs trade. Short one, long the other is a pairs trade. With these instruments, all you have to do is go long the undervalued, or short the overvalued if you want. Or do half long under, short half over. More... In your earlier post you quoted, "They must be negatively correlated by -0.9 to -0.99 to qualify as a pair trade" Then how you will take both Short and Long positions?
Quote from bwolinsky: Shorting both is not a pairs trade. Short one, long the other is a pairs trade. With these instruments, all you have to do is go long the undervalued, or short the overvalued if you want. Or do half long under, short half over. More... In your earlier post you quoted, "They must be negatively correlated by -0.9 to -0.99 to qualify as a pair trade" Then how you will take both Short and Long positions?
