Long STX / Short LINK · 1h pair

Correlation: 0.83 · Cointegrated: yes
Z-score: 1.72 entry / 0.29 rolling
Half-life 3.5h · Hurst 0.90 · Hedge ratio 0.55
Pair volatility: 25.55%

Backtest: 70.59% win · Sharpe -0.40 · -0.17% return · 1.10% max drawdown

Pair Analysis: Long STX / Short LINK

• Roll Z-Score: 1.21 (1h) / 1.20 (4h)
  • Interpretation: The positive z-score indicates LINK is currently "rich" relative to STX. Your directional intent (Long STX / Short LINK) is aligned with the quant-optimal direction.
• Correlation: 0.82 (Strong)
• Hurst Exponent: 0.84–0.92 (Trending)
  • Note: The high Hurst exponent suggests the pair is currently trending rather than mean-reverting. This increases the risk of the spread continuing to widen against the position.
• Half-Life: 26h (4h timeframe)
• Sentiment:
  • STX: Neutral; muted community activity.
  • LINK: Bearish; sentiment is weighed down by stagnant market activity and negative price predictions.

Remark:
The setup is statistically aligned with your directional intent, as LINK is currently trading rich relative to STX. However, the high Hurst exponent (0.84–0.92) is a critical warning: the pair is exhibiting trending behavior rather than the mean-reversion required for this strategy to be effective. While the bearish sentiment on LINK provides a fundamental tailwind for the short leg, the lack of mean-reversion signals suggests caution regarding entry timing.