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Pair Trading Lab offers advanced tools for setting up and trading your own pair trading portfolios:

  • Database of up to 10,000,000 pre-analyzed pairs
  • Advanced online backtester
  • Online cointegration analyzer
  • Private repository of backtests & analyses
  • Portfolio organizer & backtester
  • Free automated trading platform
What Is Pairs Trading?
people

Pairs trading is a market neutral trading strategy enabling traders to profit from virtually any market conditions: uptrend, downtrend, or sideways movement. This strategy is categorized as a statistical arbitrage and convergence trading strategy.

The strategy monitors performance of two historically correlated securities. When the correlation between the two securities temporarily weakens, i.e. one stock moves up while the other moves down, the pairs trade would be to short the outperforming stock and to long the underperforming one, betting that the "spread" between the two would eventually converge. The divergence within a pair can be caused by temporary supply/demand changes, large buy/sell orders for one security, reaction for important news about one of the companies, and so on. Read more at Wikipedia.

Why Trade Pairs?

Thanks to market neutrality, this trading strategy can be very safe (if diversified) and immune to global market crisis, even when the entire market or sector falls down. If you trade enough pairs at the same time, your pair trading portfolio could perform well also in difficult market situations.

Let's take a look on example: we take these two stocks - GlaxoSmithKline plc and Novartis AG. These are stocks of companies in the healthcare sector and their prices are quite correlated. Now, let's make a backtest of difficult period of 2008-2009 where the stock market dropped a lot because of the crisis:

Backtest GSK vs NVS in period 2008-2009

As you can see, prices of both stocks dropped considerably in this period (i.e. NVS price dropped by terrifying 38%). But if you traded these stocks as a pair, you would gain amazing 125% of initial capital (considering 50% margin) with drawdown being just 9%, which is an excellent result for this difficult period!

How Does This Website Help You?

This website represents a complete set of tools you require to setup your own pair trading portfolio, all in one. You may use it to:

[1] available to Premium Members only

Latest News
2023-03-08
PTL Trader v1.7.0 Released
PTL Trader v1.7.0 has been just released, fixing few compatibility issues. Read More
2021-07-02
PTL Trader v1.6.0 Released
PTL Trader v1.6.0 has been just released! This is not the ordinary release - PTL Trader is finally here as free & open-source software! Announcement
2021-02-01
Brexit Update
We are deeply sorry to inform you that premium subscription is no longer available to customers of the United Kingdom until further notice. Subscriptions already purchased before won't be affected.
2019-09-01
Payments Upgrade
All credit card payments are now fully SCA/PSD2 compliant and processed by Stripe.
2018-06-23
Google Historical Data Update
We regret to inform that after many years Google suddenly decided to close their public historical data API. This means that it is not possible to use non-US based equities anymore for back-testing. US stocks and ETFs (listed at NYSE, NASDAQ, NYSEARCA) are available without restrictions. We hope to replace Google with another provider in the future.
2017-11-09
PTL Trader v1.5.0 Released
PTL Trader v1.5.0 has been just released, finally introducing the CFD support and fixing few issues. Changelog
2016-12-21
PTL Trader v1.4.0 Released
PTL Trader v1.4.0 has been just released, introducing full support for advanced Kalman-grid and Kalman-auto models. Changelog
2016-12-17
Credit Card Payments
In addition from Paypal, you may now purchase premium membership using credit cards directly.
2016-11-25
IB API Issues
Important: If you have problems retrieving correct and complete historical data or connecting to IB API (error 503), please upgrade your IB Gateway to recent version 960.2g or newer ASAP. Download
2016-11-23
PTL Trader v1.3.1 Released
PTL Trader v1.3.1 has been just released. It fixes important issues, upgrade is highly recommended. Changelog
2016-11-09
5 Years of Pair Trading Lab
Today is the day! Celebrate our fifth bithday with us enjoying 20% discount and as a special gift for you we have prepared a free video tutorial demonstrating some of the new features: Watch on YouTube
2016-11-08
New Website Release
We are pleased to announce major upgrade to this website: there is a new FAQ page with PTL Trader related info, new Kalman-Auto model, advanced portfolio management features, historical versions of Pair Database ready to explore and much more.
2016-11-08
PTL Trader v1.3.0 Released
PTL Trader v1.3.0 has been just released. This version also finally runs on Linux and macOS! Changelog
2016-09-22
PayPal Available
PayPal payments are now finally available! More payment methods will follow.
2016-09-15
Kalman-Grid v2 Available
We are happy to announce that a new pairs trading model, Kalman-Grid v2, is now available. This model brings superior performance of Kalman filter applied to pairs trading without any need to optimize sensitive parameters. More info
Recent Analyses

SPY vs UUP

2023-01-01 till 2024-01-01

Co95:
Co99:
CAGR:-1.89

IWV vs UUP

2023-01-01 till 2024-01-01

Co95:
Co99:
CAGR:-1.82

SPXL vs UUP

2023-01-01 till 2024-01-01

Co95:
Co99:
CAGR:-0.69

FLGB vs FXB

2023-01-01 till 2024-01-01

Co95:
Co99:
CAGR:0.99

PLTR vs CRWD

2021-01-01 till 2024-10-01

Co95:
Co99:
CAGR:2.35
Recent Backtests

CRWD vs PLTR

2020-12-08 till 2024-11-29

ROI: -19.94
CAGR:-5.44
MaxDD:64.82

BTCO vs MSTR

2024-07-24 till 2024-12-11

ROI: 28.84
CAGR:93.59
MaxDD:35.12

BTCO vs MSTR

2024-03-20 till 2024-12-11

ROI: 39.40
CAGR:57.75
MaxDD:37.74

MA vs V

2019-01-02 till 2024-11-29

ROI: -2.39
CAGR:-0.41
MaxDD:13.61

GS vs MS

2013-01-02 till 2023-12-28

ROI: 9.68
CAGR:0.84
MaxDD:26.49
FB LN TW

Disclaimer: Backtested, simulated or hypothetical performance results have certain inherent limitations. Unlike the results shown in an actual performance record, these results do not represent actual trading. There are numerous factors related to the stock market in general and to the implementation of any stock market timing program, which cannot be fully accounted for in the preparation of hypothetical performance results. The backtested results listed here do not take into consideration slippage, fees, taxes, or dividends and interest earned on cash positions. These factors would affect actual trading results. Simulated, backtested or hypothetical stock trading systems in general are also subject to the fact that they are designed with the benefit of hindsight. Backtested performance does not represent actual performance and should not be interpreted as an indication of such performance. No representation is being made that you will or is likely to achieve profits or losses similar to these being shown. This site provides impersonal educational stock trading information, and therefore, no consideration can or is made toward your financial circumstances. All material presented within is not to be regarded as investment advice, but for general informational purposes only.