Pair Trading Strategy Journal

Discussion in 'Journals' started by jonnysharp, Aug 18, 2008.

  1. riviera

    riviera



    Mean reversion in sight , profitable spread = + 4.5%



    [​IMG]
     
    #2561     Jul 7, 2011
  2. riviera

    riviera

    07/08/2011 today
    market opening

    short SBUX
    long MKC
     
    #2562     Jul 8, 2011
  3. So your strategy here is to short EFX and go long NOC? If so, how did it play out today?
     
    #2563     Jul 8, 2011
  4. riviera

    riviera

    right, to unbuckle my positions taken on June 30th (no reverse) , according with mean reversion achieved on my own model.

    Monday 11 :

    long ATI
    short FAST


    long DE
    short EMR
     
    #2564     Jul 9, 2011
  5. To all other PTF USER: I have the following issue and looking to see if it only pertains my setup.

    I notice PTF v301 and v303 are returning different values. Even PTF v301 returns different co-integration and correlation values from two different database - one created 40 days ago and one created today. Ran the 'find pair' function no both database for the same industry and compared the results. They are very different!

    I was wondering if anyone did some tests with both PTF v301 and v303 and see how the values returned. I upgraded from PTF v301 to v303 and noticed both the co-integration and correlation values of my pairs and it changed dramatically. Needlessly to say it was a confidence bumper. However, after running several tests this morning I was baffled even more.

    I emailed Jared regarding this issue and I was told that he is not aware of any other people experiencing this same issue. So I ran a couple of tests and lay it out in a spreadsheet for those using PTF v301/v303 to see. I also forwarded this result to Jared and hopefully he will have this sorted out.

    Observation:
    1. v301 and v303 definitely returned different values (even on a fresh database created using the respective version)

    2. testing in backward or in forward sequence (alphabetically from a to z and z to a) returned different values for the same pair even in the same version. This should be the same.

    3. compared to a database created 40 days ago, created using PTFv301, returns different value from a database (stock groups) created today, also created using PTFv301. (Two tests were performed today - on the old database and on the new one created today.)

    Thanks
    - BT



    Here are the tests:

    TEST1
    PTF v301 with existing database (created when I first purchased the software ~ 40 days ago). The group has the following value:
    max day in trade = 14
    Gather back data for: 3 years

    TEST2
    PTF v301 with new database with default parameters. Old database is deleted using SQL Server Manager Studio.
    Gather back data for: 3 years

    TEST3
    PTF v303 with new database created - did not use the PTF v301 database.
    Gather back data for: 3 years

    TEST4
    PTF v303 with the same database as TEST3 but one hour later
    Gather back data for: 3 years

    TEST5
    PTF v303 with the same database as TEST3 but in backward sequence (starting from the bottom of the list)
    Gather back data for: 3 years

    TEST6
    PTF v303 with old database (same database as TEST1)
    max day in trade = 14
    Gather back data for: 3 years
     
    #2565     Jul 13, 2011
  6. To all other PTF USER: I have the following issue and looking to see if it only pertains my setup.

    I notice PTF v301 and v303 are returning different values. Even PTF v301 returns different co-integration and correlation values from two different database - one created 40 days ago and one created today. Ran the 'find pair' function no both database for the same industry and compared the results. They are very different!

    I was wondering if anyone did some tests with both PTF v301 and v303 and see how the values returned. I upgraded from PTF v301 to v303 and noticed both the co-integration and correlation values of my pairs and it changed dramatically. Needlessly to say it was a confidence bumper. However, after running several tests this morning I was baffled even more.

    I emailed Jared regarding this issue and I was told that he is not aware of any other people experiencing this same issue. So I ran a couple of tests and lay it out in a spreadsheet for those using PTF v301/v303 to see. I also forwarded this result to Jared and hopefully he will have this sorted out.

    Observation:
    1. v301 and v303 definitely returned different values (even on a fresh database created using the respective version)

    2. testing in backward or in forward sequence (alphabetically from a to z and z to a) returned different values for the same pair even in the same version. This should be the same.

    3. compared to a database created 40 days ago, created using PTFv301, returns different value from a database (stock groups) created today, also created using PTFv301. (Two tests were performed today - on the old database and on the new one created today.)

    Thanks
    - BT



    Here are the tests:

    TEST1
    PTF v301 with existing database (created when I first purchased the software ~ 40 days ago). The group has the following value:
    max day in trade = 14
    Gather back data for: 3 years

    TEST2
    PTF v301 with new database with default parameters. Old database is deleted using SQL Server Manager Studio.
    Gather back data for: 3 years

    TEST3
    PTF v303 with new database created - did not use the PTF v301 database.
    Gather back data for: 3 years

    TEST4
    PTF v303 with the same database as TEST3 but one hour later
    Gather back data for: 3 years

    TEST5
    PTF v303 with the same database as TEST3 but in backward sequence (starting from the bottom of the list)
    Gather back data for: 3 years

    TEST6
    PTF v303 with old database (same database as TEST1)
    max day in trade = 14
    Gather back data for: 3 years
     
    #2566     Jul 13, 2011
  7. To all other PTF USER: I have the following issue and looking to see if it only pertains my setup.

    I notice PTF v301 and v303 are returning different values. Even PTF v301 returns different co-integration and correlation values from two different database - one created 40 days ago and one created today. Ran the 'find pair' function no both database for the same industry and compared the results. They are very different!

    I was wondering if anyone did some tests with both PTF v301 and v303 and see how the values returned. I upgraded from PTF v301 to v303 and noticed both the co-integration and correlation values of my pairs and it changed dramatically. Needlessly to say it was a confidence bumper. However, after running several tests this morning I was baffled even more.

    I emailed Jared regarding this issue and I was told that he is not aware of any other people experiencing this same issue. So I ran a couple of tests and lay it out in a spreadsheet for those using PTF v301/v303 to see. I also forwarded this result to Jared and hopefully he will have this sorted out.

    Observation:
    1. v301 and v303 definitely returned different values (even on a fresh database created using the respective version)

    2. testing in backward or in forward sequence (alphabetically from a to z and z to a) returned different values for the same pair even in the same version. This should be the same.

    3. compared to a database created 40 days ago, created using PTFv301, returns different value from a database (stock groups) created today, also created using PTFv301. (Two tests were performed today - on the old database and on the new one created today.)

    Thanks
    - BT



    Here are the tests:

    TEST1
    PTF v301 with existing database (created when I first purchased the software ~ 40 days ago). The group has the following value:
    max day in trade = 14
    Gather back data for: 3 years

    TEST2
    PTF v301 with new database with default parameters. Old database is deleted using SQL Server Manager Studio.
    Gather back data for: 3 years

    TEST3
    PTF v303 with new database created - did not use the PTF v301 database.
    Gather back data for: 3 years

    TEST4
    PTF v303 with the same database as TEST3 but one hour later
    Gather back data for: 3 years

    TEST5
    PTF v303 with the same database as TEST3 but in backward sequence (starting from the bottom of the list)
    Gather back data for: 3 years

    TEST6
    PTF v303 with old database (same database as TEST1)
    max day in trade = 14
    Gather back data for: 3 years
     
    #2567     Jul 13, 2011
  8. ps18

    ps18

    Are these pairs really in the same industry???
     
    #2568     Jul 13, 2011
  9. I noticed v303 calculating differently too. I asked Jared and he said they modified the code to only look at 1 year data in v303 to avoid software from crashing. He thinks this number is better or more informative. I don't know what to make of the whole thing. I am running DFuller tests in matlab as well and it does seem that cointegration moves a lot based on near term data. e.g. SAIA / XTN was a great pair and both CADF and PTF numbers calculated higher COINT. Recently (past couple of weeks) the pair has gone to hell and CADF test says they are not co-integrated any more. PTF v301 agrees and shows 13% cointegration. So it works but if you get in on a pair and it goes to fell and cointegration number falls off do you get out ? or wait to see if comes back. Half life of this pair is like 12 days so do you wait ?






     
    #2569     Jul 13, 2011
  10. DBS67

    DBS67

    With less than 6 months data S&P Transports will not give stable results. Nor will a single number (which is what? the confidence interval?) convey the tradeability of a cointegrated pair.
     
    #2570     Jul 14, 2011