A user-friendly module designed for long-short strategies in the Economatica system that functions with great flexibility and allows the user to analyze a large number of possibilities.

The user defines the list of pairs and the system displays the current ratio (ratio is the long price divided by the short price), the mean, the standard deviation and the difference between the current and mean ratios. The difference is expresed in standard deviations

The system also offers a historical graph of the ratio, mean and standard deviation for each pair.

The period used for the calculation of the mean and standard deviation can be easily defined by the user.

This module uses Economatica's integrated database so that the user does not have to import historical data or be concerned with updates and adjustments for corporate actions.

Screening

In addition to analyzing user-selected pairs, this module can perform screening. Through this process the system will screen through thousands of pairs and identify those that meet the user's criteria.

Filtering criteria consists of the following types:
- Find pairs whose ratio is greater than N standard deviations from the mean
- Find only non-directional pairs (low beta)
- Find only intrasector pairs
- Find only pairs of different classes of shares of the same company

Back test

The system offers a resource "Back Test" which allows the user to determine what would've been the return of a pair had it been formed or not formed during a specified period of time as per criteria defined by the user.

The system informs the total return in the period and also presents graphically the periods in which the pair was formed (black ratio line) and the periods in which the pair was not formed (gray ratio line). The variation of the ratio for a formed pair will be displayed in a yellow rectangle underneath the period in which it existed.

Portfolio Pairs

Beyond the analysis of simple pairs, the system also can analyze portfolio pairs, i.e., pairs formed by a long-only portfolio (consisting of various stocks) and a short-only portfolio (consisting of various stocks). In the adjacent example the long composition consists of 3 stocks and the short composition consists of 5 stocks.