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Pairs Trading Strategy Excel Template

Execute market-neutral pairs trading strategies with statistical arbitrage analysis, correlation modeling, and mean reversion tracking for consistent profits.


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Master Market-Neutral Trading with Statistical Arbitrage

Pairs trading is a market-neutral strategy that profits from the statistical relationship between correlated securities. Our Pairs Trading Strategy template provides comprehensive tools to identify trading pairs, analyze statistical relationships, execute market-neutral strategies, and manage risk with institutional-quality analysis.

From correlation analysis to mean reversion tracking, implement sophisticated quantitative strategies. Built for quantitative traders, hedge fund managers, and institutional investors, this template helps you execute consistent market-neutral strategies with statistical edge.

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Comprehensive Statistical Relationship Analysis

Correlation & Cointegration Analysis

Calculate rolling correlations, cointegration tests, and long-term statistical relationships between securities. Identify pairs with stable historical relationships suitable for pairs trading.

Spread Analysis & Z-Score

Calculate price spreads, spread ratios, and z-scores to identify trading opportunities. Monitor spread deviations from historical norms and mean reversion patterns.

Beta Calculation & Hedging

Calculate hedge ratios using beta coefficients and regression analysis. Determine optimal position sizes to create market-neutral portfolios and minimize systematic risk.

Statistical Significance Testing

Perform statistical tests to validate pair relationships including t-tests, ADF tests, and Johansen cointegration tests. Ensure statistical significance before executing strategies.

Trading Strategy Implementation & Monitoring

Entry & Exit Signals

Generate trading signals based on spread z-scores, moving average crossovers, and statistical thresholds. Define entry and exit criteria for systematic strategy execution.

Position Sizing & Risk Management

Calculate optimal position sizes using Kelly criterion, volatility-based sizing, and risk parity methods. Implement stop-loss and profit-taking rules for risk management.

Performance Tracking

Monitor strategy performance including P&L, Sharpe ratio, maximum drawdown, and hit rate. Track performance attribution and identify strategy improvements.

Mean Reversion Monitoring

Track mean reversion speed, half-life calculations, and reversion probability. Monitor changing market conditions that may affect pair relationships.

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Frequently Asked Questions

How do I identify good pairs for trading?

The template uses correlation analysis, cointegration tests, and spread stability metrics to identify suitable pairs. It screens for high correlation, stable relationships, and mean-reverting spread characteristics.

What is the optimal holding period for pairs trades?

The template analyzes mean reversion half-life to determine optimal holding periods. It tracks how quickly spreads revert to mean and provides guidance on trade duration and timing.

How does it handle changing correlations?

The template uses rolling correlation analysis and dynamic hedging ratios to adapt to changing market conditions. It includes alerts when pair relationships deteriorate or become unstable.

Can it work with different asset classes?

Yes, the template can analyze pairs across stocks, ETFs, futures, and other securities. It includes sector-specific analysis and cross-asset pair identification capabilities.

How does it manage transaction costs?

The template includes transaction cost analysis, bid-ask spread impact, and net profit calculations. It optimizes trade frequency and position sizing to maximize after-cost returns.

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Frequently Asked Questions

If you question is not covered here, you can contact our team.

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How do I analyze data?
To analyze spreadsheet data, just upload a file and start asking questions. Sourcetable's AI can answer questions and do work for you. You can also take manual control, leveraging all the formulas and features you expect from Excel, Google Sheets or Python.
What data sources are supported?
We currently support a variety of data file formats including spreadsheets (.xls, .xlsx, .csv), tabular data (.tsv), JSON, and database data (MySQL, PostgreSQL, MongoDB). We also support application data, and most plain text data.
What data science tools are available?
Sourcetable's AI analyzes and cleans data without you having to write code. Use Python, SQL, NumPy, Pandas, SciPy, Scikit-learn, StatsModels, Matplotlib, Plotly, and Seaborn.
Can I analyze spreadsheets with multiple tabs?
Yes! Sourcetable's AI makes intelligent decisions on what spreadsheet data is being referred to in the chat. This is helpful for tasks like cross-tab VLOOKUPs. If you prefer more control, you can also refer to specific tabs by name.
Can I generate data visualizations?
Yes! It's very easy to generate clean-looking data visualizations using Sourcetable. Simply prompt the AI to create a chart or graph. All visualizations are downloadable and can be exported as interactive embeds.
What is the maximum file size?
Sourcetable supports files up to 10GB in size. Larger file limits are available upon request. For best AI performance on large datasets, make use of pivots and summaries.
Is this free?
Yes! Sourcetable's spreadsheet is free to use, just like Google Sheets. AI features have a daily usage limit. Users can upgrade to the pro plan for more credits.
Is there a discount for students, professors, or teachers?
Currently, Sourcetable is free for students and faculty, courtesy of free credits from OpenAI and Anthropic. Once those are exhausted, we will skip to a 50% discount plan.
Is Sourcetable programmable?
Yes. Regular spreadsheet users have full A1 formula-style referencing at their disposal. Advanced users can make use of Sourcetable's SQL editor and GUI, or ask our AI to write code for you.
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Master Statistical Arbitrage

Professional pairs trading tools to execute market-neutral strategies with statistical analysis and quantitative precision.

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