Pairs Trading Backtest
Statistical arbitrage strategy backtesting with automatic pair discovery and mean reversion trading
Cointegration
Mean Reversion
Statistical Arbitrage
Backtest Configuration
Set up your pairs trading strategy parameters
Loads symbols and core config from strategies saved in Backtest Engine.
Tip: Use stocks from the same sector for better cointegration
Run a backtest to see results
About Pairs Trading
How It Works
- Identifies cointegrated pairs using statistical tests
- Calculates spread between pairs using hedge ratio
- Enters positions when spread diverges (high z-score)
- Exits positions when spread converges (low z-score)
- Assumes mean reversion of the spread
Best Practices
- Use stocks from same sector for better cointegration
- Monitor cointegration p-values regularly
- Set stop-losses for diverging spreads
- Test multiple parameter combinations