Pair is strongly reverting towards the mean with accelerating velocity and stable volatility.
Regime: STRONG_REVERSION (high confidence)
Correlation: 0.65 · Cointegrated: yes
Z-score: 1.89 entry / 1.54 rolling
Half-life 3.4h · Hurst 0.88 · Hedge ratio 0.90
Pair volatility: 38.01%
Backtest: 70.59% win · Sharpe 0.52 · 0.46% return · 2.36% max drawdown
Pair Analysis: Long BB / Short AZTEC
This setup aligns with the quant-optimal direction (Shorting the relatively "rich" asset, AZTEC, against the "cheap" asset, BB).
Statistical Diagnostics
- Roll Z-Score: 1.54 (1h) / 2.13 (4h)
- Interpretation: The spread (AZTEC/BB) is currently elevated. A positive z-score indicates AZTEC is trading rich relative to its historical mean against BB.
- Correlation: 0.65 (1h) / 0.61 (4h)
- Interpretation: Moderate correlation; the pair exhibits sufficient co-movement for mean-reversion strategies, though it is not tightly coupled.
- Half-Life: 81h (1h) / 26h (4h)
- Interpretation: The 4h half-life (~1.1 days) suggests a relatively quick mean-reversion cycle, making this a viable short-to-medium-term trade.
- Hedge Weights (4h): 35.2% BB / 64.8% AZTEC
- Note: Sizing based on 4h weights is recommended for stability.
Trade Context
- Alignment: The user-specified direction (Long BB / Short AZTEC) is quant-optimal based on the positive z-score (AZTEC rich vs. BB).
- Sentiment: No specific sentiment data available for these assets; the trade is currently driven by statistical divergence rather than fundamental news.
- Execution: Both assets are tradeable on Hyperliquid (BB on
xyz dex, AZTEC on core). Ensure sufficient USDC collateral is available for both legs.
BB
AZTEC