Simple Method to Find the “Right” Five Stocks for PCA Pairs Trader Pro Open https://finviz.com/map.ashx?t=sec Hover over a stock sector. Select the first five stocks (or the second five stocks). Backtest and optimize over at least one year. Use a time frame of 15 minutes to 1 hour. One hour is the optimal interval. Advisor … Read more
How to Properly Specify the Order of Asset Symbols When Using the PCA Method Implemented in the PCA Arbitrage 3X EA Expert Advisor The Principal Component Analysis (PCA) method has long been recognized as a powerful tool for constructing market-neutral hedging strategies. It enables the analysis of the covariance structure of assets, isolates their contributions … Read more
By Mahavir Bhattacharya Welcome to the second part of this two-part blog series on the bias-variance tradeoff and its application to trading in financial markets. In the first part, we attempted to develop an intuition for bias-variance decomposition. In this part, we’ll extend what we learned and develop a trading strategy. Prerequisites A reader with … Read more