Pair Trading Lab > Questions & Answers

Z-score question

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Douglas Goullet:
Is the Z score the standard deviation trigger? So if in my Ratio system I use Standard deviation at 2.5, my Z score will trigger the trade at =<-2.5 or => 2.5, correct? Thanks.

admin:
Yes, correct. You can see detailed explanation at the Wiki. For uptick and downtick modes the Z-score of previous day matters too.

Douglas Goullet:
thank you.

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