Algorithmic systems
What is Statistical Arbitrage (StatArb) and how do automated systems trade mean-reverting futures pairs across global indices?
By Easy Money Scanner · Educational reference · Not investment advice
The short answer
Statistical arbitrage uses quantitative models to trade pairs or baskets of correlated futures, betting that temporary price divergences between historically linked instruments will revert to their mean.
How it works
StatArb systems rely on historical correlation and cointegration statistics, but these relationships can break down structurally, causing sustained losses if the model fails to adapt to new regimes.
An example
Long ES, short YM on correlation divergence.
Risk & limitations
Correlations can break down permanently, causing large losses.
Examples are hypothetical, not trade recommendations. US contract and regulatory references do not automatically apply in Canada. Rules, margin requirements and broker policies can change; confirm them with the relevant authority and your broker.