If you take two random variables that are correlated and create any composition out them the resulting variable will be still as random but with (possibly) lower or higher frequency of oscillation and lower or higher standard deviation. Pair trading is an illusion. Take any stock, future, etc. and play half of your capital you'd normally play with and reserve the other half for a repair strategy, you'll come up with virtually the same results. Just my $0.02. (2 years of in-depth studies and testing) Cheers.