LONG FCS (GREEN) current price 11.61
Correlation --> 80%
Co-Integration --> 0.92
Based on trade history of this pair , I expected to make money on one leg only.
But at the end of the day the chart help me see the correlation between the 2 stocks ( just like the stock above). There's a lot of tools for pair trading analysis . I mainly use my excel model to find trades, but here some good tools you could use :
for Correlation :
http://www.sectorspdr.com/correlation/ , calculate correlation for any stocks vs other stocks and spider etf , very good tools
Once you have found you pairs , you can backtest them here , http://www.pairtradinglab.com/index.php
very good website, helps me a lot.
also pay a visit to these guy , http://www.pairslog.com/ , they basically allow you to create a big portfolio of pairs and test them in real time. The service is currently free as they are still in beta mode. the community is great , good knowledge exchange. I hope this will help , let me know if you have any questions :)
I started using the percent/compare chart lately just to see the difference in % between the 2 stocks in the pair. if it's too wide , i tend not to enter it. still trying to get comfortable with it .