### Comment:
For example stocks that in the same industry and tend to move with positive correlation to each other like Coke and Pepsi. Then you run a Kalman filter, solve for Eigen values, and then short/long whenever one stock deviates too much from the mean of the two. It's a kind of mean reversion strategy. Thats one form of stat arbitrage I know, I think there are other forms as well.

### REPLY:
Do finance people just come up with new algorithms just so they can be namedropped across the internet like this?

### END.