What is Pairs Trading and Pairs Trading Strategy in NSE

Pairs trading is a non-directional, relative value investment method. It aims to identify two similar companies or funds whose equity stocks are now trading at a price relationship that is outside of their historical trading range. This investment technique entails purchasing the discounted security and selling the overvalued security while remaining market neutral. We also … Continue reading “What is Pairs Trading and Pairs Trading Strategy in NSE”

Correlation Coefficient Indicator Formula, Example

Statistically speaking, we say two sets of data or two variables as correlated if there exists a statistical relationship (linear interdependence) between them. If two data sets or variables have a strong statistical relationship between them, we identify them as highly correlated. The Correlation Coefficient summarizes these two data sets into a single number between +1 … Continue reading “Correlation Coefficient Indicator Formula, Example”