What is the 'Error Ratio' used for in pair trading? Option: To calculate the expected return from a pair trade, To predict the future price of a stock, To decide which stock should be the independent variable and which should be the dependent variable, To determine the correlation between two stocks

What is the 'Error Ratio' used for in pair trading?

What is the significance of a lower 'Error Ratio' in pair trading?

What is the key principle behind identifying pair trading opportunities based on the ratio?

Why does the author prefer using the ratio as the variable for pair trading?

What is the purpose of using the density curve in pair trading?

What is the key trigger for initiating a pair trade?