Diff ZScore 2 pairs

Name: Diff ZScore 2 pairs
Brand: Doveforexmarkets
SKU: 1008
Price: 13.00 USD
Availability: InStock

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The Z-score is a statistical measurement that helps traders identify when the spread between two securities is statistically significant. It's used in pairs trading to help traders determine if the spread is overvalued or undervalued, and to signal when to enter or exit a trade.

Here's how to calculate the Z-score:

Identify the pair: Find two securities with a strong historical correlation.
Calculate the spread: The spread is the difference in price between the two securities.
Standardize the spread: Subtract the mean from the spread and divide by the standard deviation. The result is the Z-score, which indicates how many standard deviations away from the mean the spread is.