[post] Introduction A great pair trade can do wonders for portfolio diversification, but designing and managing one can be challenging. I think a great pair trade requires a mix of fundamental, technical, and statistical analysis since there’s an element of market timing involved. If we get down to its components, pair trading relies on some aspect of mean reversion , betting that the perceived gap in prices will either narrow or widen within the investment period. For it to work, the pair needs to have a fundamental (e.g. revenue sources, products, etc.) link, a historical price relationship, and a few…