Pair is strongly diverging away from the mean. High risk of further deviation.
Regime: STRONG_DIVERGENCE (low confidence)
Correlation: 0.65 · Cointegrated: yes
Z-score: 1.27 entry / 5.06 rolling
Half-life 0.6h · Hurst 0.89 · Hedge ratio 0.50
Pair volatility: 28.54%
Backtest: 68.00% win · Sharpe 2.38 · 1.47% return · 1.66% max drawdown
Pair Analysis: Long YGG / Short SUPER
- Roll Z-Score: 5.06 (1h), 2.53 (4h), 0.04 (1d)
- Note: The 1h and 4h z-scores are significantly positive, indicating SUPER is currently "rich" relative to YGG. This aligns with a mean-reversion trade (Long YGG / Short SUPER).
- Correlation: 0.65 (1h)
- Half-Life: 14h (1h timeframe)
- Hedge Weights (4h): 38% YGG / 62% SUPER
Sentiment & Context
- YGG (Bearish): Sentiment is negative due to the shutdown of its game publishing arm and staff reductions. The market views its pivot to AI as a survival tactic rather than a growth catalyst.
- SUPER (Bullish): Sentiment is positive, driven by institutional endorsement (Invesco management of the Superstate USTB fund) and active utility as collateral.
Remark
This setup presents a high-conviction technical mean-reversion signal fighting a strong fundamental divergence.
Technically, the pair is overextended (z-score > 5.0 on 1h), suggesting SUPER has outperformed YGG to an unsustainable degree. However, the fundamental sentiment is diametrically opposed: you are effectively betting on a "weak" asset (YGG) to catch up to a "strong" asset (SUPER).
Risk Warning: Because the sentiment is fundamentally bearish on the long leg (YGG) and bullish on the short leg (SUPER), this trade carries significant "trend-following" risk. If the fundamental divergence continues to widen, the technical mean-reversion signal may fail to materialize. Proceed with caution; this is a classic "catching a falling knife" setup if the fundamental narrative remains the primary driver of price action.
YGG
SUPER