From the documentation of ratio model:

* we trade pair of stocks A, B, having price series A(t), B(t)

* we need to calculate ratio time series R(t) = A(t) / B(t)

* let's apply moving average of type T with period Pm on R(t) to get time series M(t)

* let's apply standard deviation with period Ps on R(t) to get time series S(t)

* now we can create Z-score series Z(t) as Z(t) = (R(t) - M(t)) / S(t), this time series can give us z-score to signal trading

* decision directly (in reality we have two Z-scores: Z-scoreask and Z-scorebid as they are calculated using different prices, but for the sake of simplicity let's now pretend we don't pay bid-ask spread and we have just one Z-score)

About your question about the MA type - nope we always use SMA for underlying MA calculation in stddev.