Sometimes a picture (or 2) is worth a thousand words so here are two views of the SLV/XLF pair trade setup with an equity curve that should make any pair trader worth his salt take notice. I’ve set the optimization routine to the new “z-rank” option and leave it to active subscribers to engage the DV setup so see how that affects the performance metrics. The trick, of course, is to find a pair with equal gains on either leg, otherwise the trader might just as well focus on the rolling z-score of a single ETF (such as silver) all by itself (Ticker A option).
I think that is VXX as the counter pair. Also a good pair until the recent SLV rout.
JP,
You are correct. One of our eagle eye readers, Robert, alerted me to the fact that the $ value did not align with XLF. General rule of thumb is that if I can screw it up, I will. Sorry for the mis-statement re XLF. The delight should have been assigned to VXX.
Thanks Bob, I reorganized the order of the buttons at the top of that page based on your good feedback. Hopefully that helps!