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Not sure about that. Correct me if I'm wrong but isn't RSC concerned with
identifying stocks or sectors outperforming (or underperforming) their
respective sector or index? With a market neutral strategy, we are looking
for securities that are highly correlated, i.e. moving in tandem with each
other.
Regards,
Kevin
At 01:50 17/04/2007 -0700, you wrote:
>In a nutshell, Relative Strength Comparison (RSC).
>
>jose '-)
><http://www.metastocktools.com/URSC/URSC.htm>http://www.metastocktools.com/
>URSC/URSC.htm
>
>--- In
><mailto:equismetastock%40yahoogroups.com>equismetastock@xxxxxxxxxxxxxxx,
>Kevin Barry <kevin_barry@xxx>
>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@xxx
> > To: <mailto:equismetastock%40yahoogroups.com>equismetastock@xxxxxxxxxxxxxxx
> > Sent: Sat, 14 Apr 2007 6:37 AM
> > Subject: 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
>
>
[Non-text portions of this message have been removed]
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