When the Relationship Changes

The frozen σ of a spread is 0.025 and the trailing residual standard deviation is now 0.030. What is the volatility ratio?

• 0.83
• 1.2
• 0.005

A diagnostic trips mid-trade. Which action is allowed in this course?

• Re-fit β on the test window and keep the trade open with the new hedge
• Close the trade on the next bar and wait for the next fold's gates before trading the pair again
• Re-run the cointegration test now and re-admit the pair if it passes