Pair is strongly diverging away from the mean. High risk of further deviation.
Regime: STRONG_DIVERGENCE (low confidence)
Correlation: 0.61 · Cointegrated: yes
Z-score: 1.48 entry / 2.00 rolling
Half-life 5.8h · Hurst 0.94 · Hedge ratio 0.35
Pair volatility: 32.62%
Backtest: 55.56% win · Sharpe -0.54 · -0.55% return · 3.71% max drawdown
Pair Analysis: Long UMA / Short ADA
- Roll Z-Score (1h): 2.00 (ADA is statistically rich relative to UMA)
- Roll Z-Score (4h): 0.59
- Roll Z-Score (1d): 2.16
- Correlation: 0.61 (1h)
- Cointegration: True (1h, 4h)
- Hedge Weights (4h): 28.9% UMA / 71.1% ADA
Analysis & Sentiment:
- Mean Reversion: The positive z-scores across timeframes (particularly the 1h and 1d) indicate that ADA is currently trading at a premium relative to UMA. Your chosen direction (Long UMA / Short ADA) aligns with the quant-optimal mean-reversion strategy for this pair.
- Sentiment: Both assets are currently facing bearish sentiment. UMA is pressured by governance and oracle centralization concerns, while ADA is struggling with technical resistance and heavy short-side positioning.
- Note: Because both assets share a bearish outlook, this trade is effectively a "relative value" play—you are betting that ADA will underperform UMA (or decline more sharply) rather than betting on an absolute UMA rally. The 1h z-score is ~1.3 hours old; verify recent price action to ensure the spread hasn't already corrected.
UMA
ADA