Pair is strongly reverting towards the mean with accelerating velocity and stable volatility.
Regime: STRONG_REVERSION (high confidence)
Correlation: 0.80 · Cointegrated: yes
Z-score: 1.97 entry / 2.72 rolling
Half-life 5.8h · Hurst 0.94 · Hedge ratio 1.00
Pair volatility: 24.30%
Backtest: 81.82% win · Sharpe 0.06 · -0.00% return · 1.38% max drawdown
Pair Analysis: Long XRP / Short ADA
- Roll Z-Score (1h): 2.72 (ADA is statistically rich relative to XRP)
- Roll Z-Score (4h): 3.34
- Correlation: 0.80 (1h)
- Hedge Ratio (4h): 1.127 (ADA/XRP)
Analysis:
- Statistical Alignment: The pair is currently exhibiting a strong mean-reversion signal. With a 1h Roll Z-Score of 2.72 and a 4h Roll Z-Score of 3.34, ADA is significantly overextended relative to XRP. The trade direction (Long XRP / Short ADA) aligns with the quant-optimal mean-reversion strategy.
- Sentiment Context: The trade is supported by divergent sentiment. XRP is currently benefiting from institutional conviction and ETF-related narratives, while ADA is facing bearish pressure with negative funding rates and technical resistance.
- Note on Data: The 1h z-score snapshot is ~1.3 hours old. Given the high z-score, verify current price action to ensure the spread hasn't already mean-reverted significantly since the last update.
Assets are tradeable on Hyperliquid (XRP: 20x max, ADA: 10x max).
XRP
ADA