Pair is strongly reverting towards the mean with accelerating velocity and stable volatility.
Regime: STRONG_REVERSION (high confidence)
Correlation: 0.74 · Cointegrated: yes
Z-score: 1.81 entry / 2.09 rolling
Half-life 1.7h · Hurst 0.91 · Hedge ratio 0.71
Pair volatility: 29.04%
Backtest: 60.00% win · Sharpe -0.34 · -0.34% return · 3.01% max drawdown
Pair Analysis: SAND / LINEA
- Roll Z-Score: 2.09 (1h) / 0.69 (4h)
- Interpretation: The positive Z-score indicates LINEA is currently trading rich relative to SAND. Your proposed direction (Long SAND / Short LINEA) aligns with mean-reversion logic, betting on the spread narrowing as LINEA potentially corrects or underperforms.
- Correlation: 0.74 (1h) / 0.76 (4h)
- Interpretation: Strong correlation suggests the pair moves together, making this a viable statistical arbitrage candidate.
- Sentiment & Context:
- SAND: Bearish; currently facing a structural downtrend with declining volume.
- LINEA: Bearish; facing extreme supply pressure from upcoming unlocks and high whale concentration.
- Remark: While both assets share a bearish outlook, the "rich" Z-score and LINEA's specific supply-side headwinds make this a compelling mean-reversion setup. You are effectively shorting the asset with higher idiosyncratic supply risk (LINEA) against a gaming token (SAND) that is already in a downtrend.
Note: Stats are snapshots; verify current prices as the 1h Z-score is ~1.3h old.
SAND
LINEA