Helium Pairs Trader (HPT)
Pairs trading is a market-neutral trading strategy that matches a long position with a short position in a pair of highly correlated instruments such as two stocks, exchange-traded funds (ETFs), currencies, commodities or options. It enables traders to profit from virtually any market conditions: uptrend, downtrend, or sideways movement.
This strategy is categorized as statistical arbitrage and is a “mean-reverting” strategy i.e., betting that the prices will eventually revert to their historical trends. Pairing trading is also attractive because it is substantially self-funding, since the short sale proceeds may be used to create the long position.
Helium Pairs Trader (HPT) is an Excel-based implementation of classic pairs trading strategy. It is designed for simplicity and ease-of-use. Among its many benefits:
- Employs everyday features of Excel. No unfamiliar, complicated system to learn
- Easy-to-use transparent interface. You always see what happening.
- Leverages Excel’s “openness”. Integrate any libraries, models or analytics that are compatible with Excel
- Pair is specified by ratio and net cost, so the actual execution price of each symbol isn’t relevant
- All orders and executions are easy to track and observe – as stated above, everything is very transparent
- Parameter-driven implementation tunes the execution of the pair. Parameters may be global or pair-specific
- User-specified trading tolerances control risk and maximize profits
- Multiple pairs can execute simultaneously
- Multiple portfolios can trade simultaneously, each in its own spreadsheet
- “All Out” facility for immediate shutdown