Statistical Arbitrage with Cointegration for Beginners

Pairs trading using statistical arbitrage from looking at cointegrated pairs is one of my favourite tools to explore. Here you will learn about ZSCORE and how it applies to pairs trading for statistical arbitrage. The explanation for this supports total newbies and may even help those who know some theory but never really understood it intuitively.
Essentially when the ZSCORE reaches an unusually high or low number of standard deviations, there could be a great opportunity to exploit for a pairs trade. There are many ways to potentially use such info which will likely explore in other videos. You may even consider building an arbitrage trading bot.
Luckily, statistical arbitrage does not have the same drawbacks as vanilla arbitrage due to how cointegration is used to identify swings that have enough liquidity for many retail traders to capitalise on.
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