Strategies
Quant trading strategies, computed daily
In plain words
A quantitative strategy is a precise rule applied to market data: it tells you when a stock deserves your attention. Instead of guessing, you measure. PairScanner applies six of these rules every day, rules that research has studied for years, and shows you the result without a single line of code.
The six strategies at a glance
Each strategy has its own page: the idea in plain words, an example signal number by number, how PairScanner computes it and what research says.
| Strategy | The idea in one sentence | Horizon | Family |
|---|---|---|---|
| Pair trading | Two linked stocks drift apart: you bet on them coming back together. | about 20 sessions | Mean reversion |
| Momentum | What rose the most over a year tends to keep going for a while. | 20 to 60 sessions | Trend |
| Relative reversal | A stock moves far more than its market and sector: you bet on a partial pullback. | 1 to 20 sessions | Mean reversion |
| Short-term reversal | The week's biggest losers often bounce a little, the biggest winners often give some back. | 5 sessions | Mean reversion |
| Statistical peers | When the stocks that most resemble a company move together, it tends to follow. | 5 to 20 sessions | Links between stocks |
| Lead-lag | Some stocks move slightly before others: the first one hints at the second. | 1 to 20 sessions | Links between stocks |
Three broad families
Mean reversion. Pair trading, relative reversal and short-term reversal bet that an unusual gap will partly close. Their starting point: markets often overreact in the short term.
Trend. Momentum bets the opposite way: what has been rising for months keeps going for a while, because information takes time to be fully reflected in prices.
Links between stocks. Statistical peers and lead-lag share one observation: information travels from one stock to another, sometimes with a slight delay.
What PairScanner does
PairScanner turns each of these rules into an algorithm. Every evening, after the US close, it updates prices, applies the six strategies and computes for every signal the expected move after costs, the estimated probability of a positive outcome, the range of plausible results and the size of a bad outcome.
For pair trading, it tests thousands of pairs every day across more than 4,000 stocks, ETFs, currencies and cryptocurrencies. You write no formula and run no calculation: you open the dashboard, read today's result and decide.
Where to start
New to the topic? Start with what is pair trading, the most intuitive strategy, then read the momentum strategy, its cousin that follows the trend instead of betting against it.
PairScanner promises no results: the figures describe what the strategies did in the past. Educational content, not investment advice; PairScanner places no orders.
See today's computed strategies