Pair Trading > Good & Bad Pairs

No Co integration & No Corellation

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Mike Murphy:
Can I play devil's advocate for a minute?

I don't care about Co-integration
I don't care about Correlation
All I want to do to pair a strong stock with a weak one.

This still provides me with the market neutral advantage which I require. I know it opens me up to various other risks e.g. sector but I believe that the added return possible accounts for this.

Is there anybody trying to pair stock in this momentum-based manner?

Pls be as hash as you like in response to this because I am suggesting a completely different approach to the selection of pairs for trading.

admin:
Hi,

could you give any example? I am not sure I fully understand your approach...

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