Pair is strongly diverging away from the mean. High risk of further deviation.
Regime: STRONG_DIVERGENCE (low confidence)
Correlation: 0.71 · Cointegrated: yes
Z-score: 1.24 entry / 1.59 rolling
Half-life 5.8h · Hurst 0.92 · Hedge ratio 0.52
Pair volatility: 34.99%
Backtest: 77.78% win · Sharpe 2.18 · 2.08% return · 1.53% max drawdown
Pair Analysis: Long XAI / Short SUI
- Roll Z-Score (1h): 1.59
- Roll Z-Score (4h): 1.82
- Correlation: 0.71
- Half-Life (4h): ~2.3 days
- Hedge Weights (4h): 29.7% XAI / 70.3% SUI
Analysis:
- Statistical Setup: The 1h and 4h z-scores are strongly positive (1.59 and 1.82), indicating that SUI is currently "rich" relative to XAI on a short-term basis. Your trade direction (Long XAI / Short SUI) is statistically aligned with a mean-reversion play, betting that this spread will contract as SUI cools off or XAI catches up.
- Sentiment Divergence: There is a significant fundamental conflict here. Sentiment for SUI is Bullish (driven by ETF demand and supply management), while XAI is Bearish (weighed down by trademark litigation and stagnant volume).
- Risk Note: While the statistical setup supports the trade, you are effectively "fighting the trend." The mean-reversion signal is strong, but the fundamental narrative is pushing the spread wider. If you enter, monitor the 4h z-score closely; if it continues to climb despite the mean-reversion setup, the fundamental strength of SUI may be overriding the statistical relationship.
Note: 1h/4h z-scores are snapshots; verify current price action as these assets have moved recently.
XAI
SUI