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## How does the concept of standard deviation relate to pair trading based on the ratio?

"Standard deviation measures the average value of the ratio, providing a baseline for comparison."

"Standard deviation quantifies the volatility of the ratio, indicating the likelihood of it reverting to the mean."

"Standard deviation determines the optimal time frame for holding a pair trade, maximizing profitability."

"Standard deviation identifies the correlation between the two stocks in the pair, highlighting their interconnectedness."

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