QuantPair is a free, web-based algorithmic trading tool designed specifically for the Indian stock market (NSE). Our platform helps traders identify statistically significant pair trading opportunities through advanced cointegration analysis, enabling market-neutral strategies that can profit in both rising and falling markets.
Trading in securities involves substantial risk of loss and is not suitable for all investors. Past performance is not indicative of future results. The information provided on this website is for educational and informational purposes only and should not be construed as financial advice, investment recommendation, or an offer to buy or sell any security. QuantPair and its creators are not registered with SEBI (Securities and Exchange Board of India) or any other regulatory authority. Always consult with a qualified financial advisor before making investment decisions. You are solely responsible for your trading decisions and any losses incurred. By using this website, you acknowledge that you understand these risks and agree to our Terms of Service.
Pair trading is a market-neutral trading strategy that involves taking simultaneous long and short positions in two historically correlated stocks. When the price relationship between the two stocks deviates from its historical norm, traders can profit by betting that the relationship will revert to the mean. This strategy was pioneered by quantitative traders at Morgan Stanley in the 1980s and has since become a staple of statistical arbitrage.
QuantPair analyzes 200 days of historical price data for each stock pair, downloaded automatically from Yahoo Finance. This lookback period provides sufficient data points for statistically significant results while remaining relevant to current market conditions.
We use Ordinary Least Squares (OLS) regression to establish the mathematical relationship between stock pairs. The regression calculates the hedge ratio (beta) that determines how many shares of one stock to trade against the other, ensuring a beta-neutral position.
The Augmented Dickey-Fuller test is a statistical test used to determine whether a time series is stationary. For pair trading, we apply the ADF test to the spread between two stocks. A stationary spread indicates that the price relationship tends to revert to the mean over time - the foundation of profitable pair trading.
Our threshold: We consider pairs with an ADF statistic below -2.5 as potentially cointegrated. The more negative the ADF value, the stronger the evidence for mean reversion.
The Z-score measures how many standard deviations the current spread is from its historical mean. QuantPair generates trade signals based on Z-score levels:
Below is an example of the type of analysis QuantPair provides for NSE F&O stocks:
| Stock X | Stock Y | Sector | Beta | ADF Stat | Z-Score | Signal |
|---|---|---|---|---|---|---|
| TATASTEEL | JSWSTEEL | Metal | 0.85 | -3.42 | +2.15 | SELL |
| HDFCBANK | ICICIBANK | Bank Nifty | 1.12 | -2.89 | -1.85 | WAIT |
| TCS | INFY | IT | 0.92 | -3.15 | -2.34 | BUY |
| RELIANCE | ONGC | Energy | 0.78 | -2.67 | +0.45 | WAIT |
| MARUTI | M&M | Auto | 0.95 | -2.98 | +1.92 | WAIT |
Note: This is sample data for illustration purposes only. Actual analysis is performed daily on 200+ NSE F&O stocks.
Our system automatically runs cointegration analysis at 10:30 AM IST every trading day, immediately after Yahoo Finance updates with the previous day's closing prices. This ensures you have fresh signals for the trading day ahead.
QuantPair calculates optimal lot sizes for F&O trading that maintain beta neutrality. This means your portfolio remains market-neutral even when using standardized F&O lot sizes.
Add promising pairs to your watchlist and track their performance with live Z-score updates and P&L calculations based on your entry prices.
View historical Z-score charts to understand how the spread has behaved over time and identify optimal entry and exit points.
Test your pair trading strategies on historical data to understand potential returns and drawdowns before risking real capital.
QuantPair was created by a team of quantitative finance enthusiasts with backgrounds in algorithmic trading, data science, and software engineering. Our mission is to democratize access to institutional-grade trading tools, making sophisticated statistical arbitrage strategies available to retail traders in India at no cost.
We believe that education and transparency are key to successful trading. That's why QuantPair is completely free to use and we provide detailed explanations of our methodology.
To use QuantPair, simply enable JavaScript in your browser and select a sector from the dropdown menu on the homepage. The tool will display all cointegrated pairs within that sector, along with their statistical metrics and current trade signals. You can add pairs to your watchlist for ongoing monitoring and receive notifications when Z-scores reach actionable levels.
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