Pair is strongly reverting towards the mean with accelerating velocity and stable volatility.
Regime: STRONG_REVERSION (high confidence)
Correlation: 0.62 · Cointegrated: yes
Z-score: 1.25 entry / 4.30 rolling
Half-life 3.8h · Hurst 0.92 · Hedge ratio 0.45
Pair volatility: 35.65%
Backtest: 61.90% win · Sharpe -0.88 · -0.79% return · 2.30% max drawdown
Pair Analysis: Long S / Short PEOPLE
- Roll Z-Score: 4.30 (1h) / 1.36 (4h) / -0.36 (1d)
- Correlation: 0.62 (1h) / 0.56 (4h)
- Hedge Weights (4h): 18.4% S / 81.6% PEOPLE
- Relative Price: 4.44 (S/PEOPLE)
- TP/SL Targets: TP 4.88 / SL 3.55
Analysis & Sentiment:
- Mean Reversion: The 1h Roll Z-Score of 4.30 indicates that PEOPLE is significantly "rich" relative to S on a short-term basis. Your chosen direction (Long S / Short PEOPLE) aligns with this mean-reversion signal, betting on the spread narrowing as PEOPLE cools off relative to S.
- Sentiment: Both assets currently hold bullish sentiment. S (Sonic) is supported by positive momentum from recent fundraising, while PEOPLE (ConstitutionDAO) is benefiting from broader retail interest in memecoins.
- Note: The 1h z-score is highly elevated, suggesting a strong short-term divergence. However, the 1d z-score is slightly negative, indicating that on a longer timeframe, the pair is closer to its mean. The 4h hedge weights (18.4% S / 81.6% PEOPLE) should be used for sizing to account for the volatility difference between the two assets.
S
PEOPLE