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Kevin Barry <kevin_barry@xxxxxxxxxxxxx> wrote: Many thanks for your suggestion. Sorry that I didn't explain it very well.
I am really looking to find a price derivative with which I can measure the
price deviation between two securities. So, security A would be treated as
a virtual straight line plot at zero with the plot of security B
oscillating around it.
Regards,
Kevin
At 10:37 14/04/2007 -0700, you wrote:
>(security("A",C)-security("B",C))/security("A")*100 {percentage plot}
>
>Not sure what you mean about plotting security A as a straight line.
>
>
>-----Original Message-----
>From: <mailto:kevin_barry%40candytape.com>kevin_barry@xxxxxxxxxxxxx
>To: <mailto:equismetastock%40yahoogroups.com>equismetastock@xxxxxxxxxxxxxxx
>Sent: Sat, 14 Apr 2007 6:37 AM
>Subject: [EquisMetaStock Group] Pairs Trading Perhaps Using The Security
>Function
>
>Hello,
>
>Could I pick your (collective) brains?
>
>Two securities can be compared using the Security function and then
>subtracting or dividing one plot from the other. The results in a trending
>plot.
>
>What I would like to achieve is to plot equity A as a straight line and
>then have the second plot displaying the difference between equity A and
>equity B. Ideally, this plot would indicate the percentage deviation rather
>than just the number of points difference.
>
>For those of you interested, the idea behind Pairs Trading is to identify
>two stocks that are closely correlated. When a divergence is detected, one
>would go long, say, equity A and short equity B in anticipation of the
>correlation being reestablished in the future. It is a market neutral
>strategy.
>
>Is this doable in Metastock?
>
>Regards,
>Kevin
>
>__________________________________________________________
>AOL now offers free email to everyone. Find out more about what's free
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>
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