Statistical Arbitrage

What Does Statistical Arbitrage Mean?
A profit situation arising from pricing inefficiencies between securities. Investors identify the arbitrage situation through mathematical modeling techniques.

Investopedia explains Statistical Arbitrage
Statistical arbitrage is not without risk; it depends heavily on the ability of market prices to return to a historical or predicted normal.

Related Terms

Arbitrage
Market Arbitrage
Rational Pricing
Risk
Tainted Alpha
Technical Analysis
More Related Terms

Related Links

Trading the Odds with Arbitrage - Profiting from arbitrage is not only for market makers--retail traders can find opportunity in risk arbitrage.
Arbitrage Squeezes Profit From Market Inefficiency - This influential strategy capitalizes on the relationship between price and liquidity.
Bettering Your Portfolio With Alpha And Beta - Increase your returns by creating the right balance of both these risk measures.
Exclusive: Learn the "House Odds" of Investing

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