In a previous article on Pairs Trading , we had talked about a concept called Mean Reversion (https://www.plindia.com/blog/what-is-pairs-trading/) and how to profit from it. Mean reversion suggests that asset prices …
The mean reversion theory is used as part of a statistical analysis of market conditions, and can be part of an overall trading strategy. It applies well to the ideas of buying low and selling high, by hoping to identify abnormal activity that will, theoretically, revert to a normal pattern.








