RIMM and NOK
have been very good for the bulls in the past few months. I recently closed long position on RIMM. Today however , RIMM is down more than 20 % ( ouch !) . NOK
is down by "only" 4.55 %. The correlation (20)between these two have above 70 % for a while. The fact that NOK
didn't plunge as much as RIMM, tells me the ratio for the two stocks is far away from the mean. And it is , currently the ration is 2.9 stand. dev away from the mean. This represent an opportunity to enter a pair trade.
Short RIMM , Long NOK
(see detail in chart)