Futures Measures

Detecting Metals in the Market

Futures Measures

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Generally stocks and metals have a negative correlation between them, however, we don't trade many pairs of stocks and metals. The reason? Their correlations are too weak to be a good candidate for a pairs trade.

However, when looking at various metals against themselves, we see a much stronger, but not perfect correlation. This makes metals a good pairs trading opportunity against different metals.

Silver has been an under-performer this year, so a potential trade may be silver relative to another metal.

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