very favoured local and arcade trade schatz bobl and eibor arbing sophisticated stacking and arb "pigs" exist everywhere with big firepower many without regard for fundamental curve shifts they just take rough with smooth and assume a mean reversion at a new level difficult to get inside or an edge over these technologies many delude themselves by legging but in teh end what they end up doing is a dircetional trade on the slower leg have experimented myself many times
Hey Chintan As i mentioned before, im NOT using the DV01 ratio based hedge, to hedge small/parallel shifts in the yield curve. The ratios i use are based on linear regression and are volatility adjusted. My ratios change every morning at the start of day, and can change dynamically as well.