Pair is strongly diverging away from the mean. High risk of further deviation.
Regime: STRONG_DIVERGENCE (low confidence)
Correlation: 0.81 · Cointegrated: yes
Z-score: -1.41 entry / -1.66 rolling
Half-life 1.8h · Hurst 0.89 · Hedge ratio 2.13
Pair volatility: 40.16%
Backtest: 61.54% win · Sharpe 1.75 · 1.46% return · 2.34% max drawdown
Pair Analysis: Long FARTCOIN / Short SOL
- Roll Z-Score: -1.66 (1h) / -1.45 (4h)
- Correlation: 0.81
- Half-Life: 43h (1h) / 10h (4h)
- Hedge Ratio: ~2.13 (Short 2.13 units of SOL for every 1 unit of FARTCOIN)
Analysis:
- Statistical Alignment: The pair is currently showing a negative z-score, indicating that the spread is statistically "cheap" (mean-reversion territory). The requested direction (Long FARTCOIN / Short SOL) aligns with the quant-optimal direction derived from the z-score.
- Sentiment Context:
- FARTCOIN: Sentiment is currently neutral and muted, lacking significant catalysts or community momentum.
- SOL: Sentiment remains fundamentally bullish due to strong network adoption, though it faces near-term technical headwinds from ETF outflows and institutional de-risking.
- Trade Note: This is a mean-reversion play betting that FARTCOIN is oversold relative to SOL. The high correlation (0.81) supports the pair's stability, but the muted sentiment on FARTCOIN suggests this trade relies heavily on technical mean reversion rather than a fundamental breakout. Monitor the 10h half-life (4h TF) for the expected speed of reversion.
FARTCOIN
SOL