A tool for searching statistical synthetic pairs.
Appearance of the widget.
The widget checks assets for stationarity using the extended Dickey-Fuller test
The extended Dickey-Fuller test is widely used in quasi-arbitrage, pair and basket trading to find cointegrated pairs.
<aside> 💡 Cointegration is a property when a price series consisting of several nonstationary series taken in a certain proportion starts to acquire the property of stationarity.
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Let's consider the property of cointegration on a practical example.
BAT is an Ethereum token that supports Brave Software's blockchain-based digital advertising platform. Internet users who browse the Internet using Brave's free web browser (available at Brave .com) can replace the ads they see with ads on Brave's ad network. Users then receive BAT from advertisers as compensation for their attention.
Source: Coinbase
BAT's price range is not stationary.
BAT
Balancer (BAL) is the Ethereum token underlying the Balancer protocol. This protocol serves as an automated market maker through which anyone can create trading pools and add liquidity to them, while receiving customizable trading fees. Balancer pools can hold up to 8 tokens. An individual weighting can be specified for each token, which can be limited to as little as 2% of the total amount.
Source: Coinbase
BAL's price range, as with BAT, is not stationary.
BAL
However, if you take the BAT vs BAL (BINANCE:BATUSDT/BINANCE:BALUSDT) basket, the synthetic series starts to exhibit stationarity properties over a certain period of time.
BAT/BAL
Trading stationary series has a number of advantages: