🔢4. Statistical Arbitrage

Statistical arbitrage is an advanced pair-trading concept and involves finding mean reversion opportunities between two assets. Mean reversion is when one asset has moved (deviated) meaningfully from the other but they tend to converge again. For example, if BTC kept falling but SOL kept rising that would mean that BTC/SOL has fallen. A trader who believes these assets are correlated can go long BTC/SOL for when this happens.