Pair is strongly diverging away from the mean. High risk of further deviation.
Regime: STRONG_DIVERGENCE (low confidence)
Correlation: 0.69 · Cointegrated: yes
Z-score: -1.93 entry / -2.11 rolling
Half-life 3.9h · Hurst 0.90 · Hedge ratio 3.32
Pair volatility: 27.73%
Backtest: 75.00% win · Sharpe 0.47 · 0.27% return · 1.10% max drawdown
Pair Analysis: Long STX / Short UMA
- Roll Z-Score: -2.11 (1h), -3.54 (4h), -1.05 (1d)
- Interpretation: The negative z-scores indicate that STX is currently "cheap" relative to UMA. The trade aligns with the quant-optimal direction (Long STX / Short UMA) across all timeframes.
- Correlation: 0.69 (1h), 0.66 (4h), 0.69 (1d)
- Hedge Weights (4h): 55.6% STX / 44.4% UMA
- Sentiment:
- STX: Bearish. Persistent selling pressure is outweighing narrative support, and bullish crowd sentiment is currently acting as a contrarian red flag.
- UMA: Bearish. Recent price action appears driven by unsustainable social hype in a thin market, with volume collapsing as the move reverses.
Remark:
This setup is statistically attractive as a mean-reversion play, with STX trading at a significant discount relative to UMA (z-score -3.54 on the 4h). However, the bearish sentiment on both assets suggests a "race to the bottom" dynamic. While the statistical edge supports the long-STX/short-UMA bias, the broader bearish sentiment implies that the spread may tighten not because STX rallies, but because UMA potentially underperforms STX in a broader market decline. Use caution and monitor for further divergence.
STX
UMA