For some time now, I have been monitoring two indices (I'll refer to them as index A and index B) which are almost exactly inversely correlated; when one moves up by a certain %, the other moves down almost the exact same %. I will refer to the combined % moves of each index as the "spread." In other words, if index A move 1% and index B moves 1%, the spread would be 2%. Statistically, I can calculate when this spread becomes exagerrated and I would like to be able to structure and place a trade that will allow me to benefit when the spread returns to "normal" levels. However, I need to incorporate time decay (theta) into the trade which infers a net short trade, and I need to be non-directional (neutral) as well. Initially, this appears to me to be a question of trading volatility. If so, possible candidates are ratio spreads, selling a put and call simultaneaously on each index, butterflys, condors, etc. An additional complexity is added when the issue of whether to place a straight or diagonal trade is considered. Would anyone be kind enough to suggest an optimal trade structure to accomplish this? Any guidance for consideration would be appreciated. Thank you.