Welcome to HedgeHub

Smart Pairs Trading Analysis Platform

Analyze Pairs

Identify statistically related pairs and evaluate long-term stability.

Run cointegration and correlation tests
Visualize price spreads & divergence patterns
Detect pairs suitable for spread trading

Generate Strategy

Build a market-neutral long/short strategy from spread or ratio signals.

Compute real-time spreads or ratios
Set entry/exit thresholds
Generate actionable long/short signals

Market Insights

Monitor external catalysts that may affect pair behaviour.

Track news, sentiment & macro events
Identify narrative shifts in the market
Spot risk factors behind divergence

How Pairs Trading Works

Pairs trading identifies two assets that typically move together. When their price relationship temporarily diverges, a market-neutral opportunity appears.

Select a pair of assets with correlated movements.
Measure their spread to understand divergence.
Convert the spread into a Z-score to standardize extremity.
Generate long/short signals when thresholds are breached (e.g., ±2).
Exit positions when the spread moves back to the long-run relationship.

Because the logic is statistical, this workflow applies to equities, ETFs, or any assets with sufficiently stable long-term relationships.

Pair Analysis

Input your stock pair and run a basic pair test.

Stock A (e.g., AAPL)

Stock B (e.g., MSFT)

Date Range

Threshhold P

Initial Capital ($)

Shares per Trade

Results

Performance Metrics

These metrics summarize key portfolio stats for the selected pair. The table refreshes after each analysis.

Visualizations

Explore the price trend of each stock, the spread or ratio between the pair, and the standardized Z-score signal when applicable.

Price Trend

Long Spread / Ratio

Z-Score (Pairs Trading Only)

📈 Strategy Suggestions

Generate a market-neutral long/short strategy tailored to your investment amount and risk preferences.

📝 1. Configure Your Preferences

💰 Investment Amount ($)

💡 Typical range for pair-trading portfolios: $1,000–$500,000. More capital enables more stable position sizing and smoother equity curves.

⚖️ Risk Level

Low – Fewer trades, wider thresholds, smaller position sizes, minimal leverage.
Medium – Balanced trade frequency and leverage.
High – More aggressive signals, tighter thresholds, higher leverage and drawdown.

📊 2. Understanding Z-score for Pairs Trading

For pairs trading, the Z-score measures how far the current price spread deviates from its historical average. It standardizes spread movements to detect statistically abnormal divergence.

Z > 2 → Spread unusually wide → Short overpriced asset, long underpriced asset.
Z < -2 → Spread unusually tight → Long overpriced asset, short underpriced asset.
Higher-risk profiles use smaller Z-thresholds for more frequent signals.

If cointegration fails, the engine can switch to a momentum model based on the A/B price ratio instead of Z-scores.

📘 Recommended Strategy

Based on your inputs, the model generates recommended allocations, entry/exit triggers (for pairs trading), expected trade behaviour, and a rationale for how the strategy adapts to your profile.

About HedgeHub

HedgeHub is a smart pairs trading analytics platform built by Duke FinTech students. It provides an intuitive, data-driven interface for exploring price relationships, testing cointegration, analyzing spreads, and generating market-neutral trading insights.

Pairs trading identifies two historically related assets whose price spread temporarily diverges. When this spread reaches statistically extreme levels, a long/short strategy may profit from convergence. HedgeHub helps users visualize these dynamics and evaluate strategy performance in an accessible way.

Team

Junze Li — Email: jl1319@duke.edu

Celia Du — Email: xd90@duke.edu

Zifei Yang — Email: zy204@duke.edu

This platform is for educational and research purposes only and does not constitute financial advice.