Strategy Methodology
Statistical Arbitrage
A strategy that exploits pricing inefficiencies between related assets by simultaneously taking long and short positions expected to converge.
Statistical arbitrage identifies pairs or baskets of assets whose prices move together historically. When the spread between them deviates beyond a threshold, the strategy takes opposing positions — long the underperformer, short the outperformer — and profits when the spread reverts.
The botwir3 arbitrage module monitors spread between configurable asset pairs across one or more platforms. When the spread exceeds the entry threshold, the module proposes a paired position. The gate validates that both legs fall within the configured constraints before the adapters submit them.
Arbitrage is not risk-free. "Statistical" is the operative word. The spread can widen instead of reverting. One leg can execute while the other fails. Correlations can break permanently. The module identifies historical relationships and proposes trades when deviations occur. Whether the deviation reverts is a market outcome, not a guarantee.
Sources
Used in
◎Statistical Arbitrage module — builder