Pairs Trading

I know someone who runs a hedge fund, he has a system where he looks at about 6000 pairs. Pairs that at first glance don't look too similar ( COF with an Insurance Co.), but he did surprisingly well. He used a standard deviation of the spread.
 
Quote from mschey:

I would short one, then buy the other. My theory was that similar assets should be priced similarily. Worked great for a while, lately, not as great as it use to be.
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So you would not buy/short simultaneously? I remember reading somewhere that you said your strategy is intraday. How long do you usually hold your positions?
 
Quote from horribilicus on 1/27/2006:
GOOG market capitalization just surpassed INTC market cap. Maybe this suggests a Pairs Trade to somebody?
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In hindsight, this was a half decent recommendation. Look at the chart on 1/27/2006
 

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Quote from horribilicus:

In hindsight, this was a half decent recommendation. Look at the chart on 1/27/2006
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why did you overlay it with msft? i wouldn't think intc or msft would make a good pair for google at all.
 
Quote from rarhoads:

I don't trade pairs anymore, but when I did this website was a good resource for correlated stocks -

www.impactopia.com


Click on the link under USA Equities and you can enter a symbol and find what stocks may trade well with it.
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just clicked on the link you posted...but it is not working...it is just me or something wrong with the site?
 
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