Kevin611 McDonald#29

Xem bản dịch

What is statistical arbitrage in forex trading?

Statistical arbitrage (stat arb) uses quantitative models to identify pricing anomalies between correlated assets or pairs. In forex, traders might long EUR/USD and short GBP/USD when models suggest EUR is undervalued relative to GBP, expecting mean reversion. Institutions deploy machine learning and regression models to refine these trades, executing across multiple venues. Benefits: market-neutral positioning, reduced exposure to directional risk. Risks: correlation breakdowns, model overfitting, and hidden tail risk during crises. Retail traders can attempt simplified stat arb by monitoring historical spreads (like EUR/GBP vs. fundamentals). Statistical arbitrage teaches traders that profits can come from probabilities and patterns, not just directional forecasts.