You have just described what most of the prop firms do, spread relative value. I think Mav is showing you can use acd to find pairs that are outside the box. I don't disagree with your description of pair trading.
Here is a chart of spy and uso ( the oil etf). Looks like the same trade to me or a correlation nightmare. You would give your risk manager a heart attack with a position like this.
What do you mean? That's 1000 basis pts!!!! That spread is huge! LOL. True correlation should never spread 1000 bps. Love that spread.
Thank God nobody on ET is discussing the Yen breakdown right now. Only the biggest move in probably 5 years across that spectrum.