Pair is strongly diverging away from the mean. High risk of further deviation.
Regime: STRONG_DIVERGENCE (low confidence)
Correlation: 0.76 · Cointegrated: yes
Z-score: 1.50 entry / 1.77 rolling
Half-life 4.1h · Hurst 0.91 · Hedge ratio 0.94
Pair volatility: 29.77%
Backtest: 46.15% win · Sharpe -1.86 · -1.18% return · 2.10% max drawdown
Pair Analysis: Long STX / Short LINEA
This setup is currently flagged as a high-conviction, fresh signal (edge 100%) with strong statistical alignment.
- Roll Z-Score: 1.77 (1h) / 1.94 (4h)
- Interpretation: The spread is statistically rich (LINEA is trading high relative to STX). The positive z-score indicates the pair is extended, supporting a mean-reversion trade (Long STX / Short LINEA).
- Correlation: 0.76 (1h) / 0.78 (4h)
- Interpretation: Strong positive correlation, making this a reliable pair for spread trading.
- Sentiment Context:
- STX: Neutral; market activity is currently muted.
- LINEA: Bearish; sentiment is weighed down by significant upcoming token unlocks (approx. 40% of market cap), which creates structural supply pressure.
- Hedge Weights (Sizing):
- 4h: 40.6% STX / 59.4% LINEA (Use these for sizing).
- 1d: 52.7% STX / 47.3% LINEA (Available for reference).
Remark: This is a fundamentally supported mean-reversion trade. The statistical richness of the spread (z-score ~1.8–1.9) aligns with the bearish fundamental outlook for LINEA due to supply-side pressure. The trade is currently active and fresh.
STX
LINEA