Pair is strongly diverging away from the mean. High risk of further deviation.
Regime: STRONG_DIVERGENCE (low confidence)
Correlation: 0.84 · Cointegrated: yes
Z-score: 1.45 entry / 1.67 rolling
Half-life 2.6h · Hurst 0.92 · Hedge ratio 0.36
Pair volatility: 18.31%
Backtest: 55.17% win · Sharpe -3.12 · -0.50% return · 0.63% max drawdown
Pair: SILVER / PAXG
Pair Stats
- 1h Roll Z-Score: 1.67 (PAXG rich vs SILVER; snapshot 1.3h old)
- 4h Roll Z-Score: 0.55
- 1d Roll Z-Score: 0.54
- Correlation: 0.84 (1h)
- Hedge Weights (4h): 25.0% SILVER / 75.0% PAXG
Sentiment
- SILVER: Bullish (strong revenue growth projections, stable outlook).
- PAXG: Bearish (stagnant market conditions, negative sentiment in gold price prediction markets).
Concise Remark
- Setup Alignment: The trade direction (Long SILVER / Short PAXG) aligns with the 1h/4h quant-optimal direction and is supported by divergent sentiment (Bullish SILVER vs. Bearish PAXG).
- Mean Reversion: The 1h z-score of 1.67 suggests the spread is currently stretched, with PAXG trading rich relative to SILVER. This provides a statistical basis for the mean-reversion entry.
- Risk Note: The 1d z-score is significantly lower (0.54) and suggests an inverse optimal direction, indicating that while the short-term setup is compelling, the longer-term trend is less clear. Monitor the 1h spread closely for mean reversion.
SILVER
PAXG