Z-score (1.28) is too close to the mean to be considered for a trade.
Regime: IDLE (high confidence)
Correlation: 0.69 · Cointegrated: yes
Z-score: 1.95 entry / 1.28 rolling
Half-life 4.7h · Hurst 0.89 · Hedge ratio 0.23
Pair volatility: 35.33%
Backtest: 61.54% win · Sharpe 2.68 · 1.90% return · 1.08% max drawdown
Pair Analysis: Long ZETA / Short AVAX
This setup is a relative-value trade betting on AVAX underperforming ZETA. While both assets face bearish sentiment, the statistical spread suggests AVAX is currently "rich" relative to ZETA, supporting a mean-reversion entry.
Statistical Diagnostics
- Roll Z-Score: 1.28 (1h), 2.36 (4h), 3.19 (1d)
- Interpretation: The positive Z-score confirms AVAX is statistically expensive relative to ZETA. The divergence is more pronounced on higher timeframes (4h/1d), suggesting a sustained deviation.
- Correlation: 0.69 (1h)
- Hedge Ratio: 0.483 (4h) — Use this for sizing (e.g., for every $1.00 of ZETA long, short ~$0.48 of AVAX).
- Half-Life: 31h (4h timeframe) — Indicates the mean-reversion process is relatively slow.
Sentiment & Context
- ZETA (Bearish): Sentiment is weighed down by a $1.42M token unlock (2.94% of circulation) scheduled for August 1, creating a supply overhang.
- AVAX (Bearish): Sentiment is also bearish due to a recent July 21 unlock and technical weakness. Rising open interest and negative funding rates suggest heavy short-selling pressure.
- Trade Note: You are entering a "bear-on-bear" relative value trade. The success of this pair depends on AVAX's technical weakness and short-selling pressure outpacing the supply-side pressure on ZETA.
Execution Details
- Venue: Hyperliquid (Core)
- Max Leverage: ZETA (3x), AVAX (10x)
- Note: Your position will be clamped to the lower cap (3x) if you attempt to exceed it.
ZETA
AVAX