Fouezz

Market-Neutral Pairs Trade

SPY/VEA  
SPY/VEA  
So here we are, S&P 500             at 2,000, bears have good arguments and bulls have good arguments as well. As of right now, I have no idea where equities are going, I'll let the market tell me.

But here is a quick trade idea I got today. By the way, please correct me if there is something wrong in my analysis as this is my first real market-neutral trade that does not involve options.

US equities have outperformed World-ex. US equities for a few years now and I don't see how that trend is likely to stop. The US economy is finally blooming and it seems like things will go well, at least in the medium-term (but that's another story).

So here is the trade: go long SPY             and go short VEA             . As for how to do this, I believe you would have to short 4.81 ( ish             ) shares of VEA             for every SPY             you buy. If someone with more market-neutral trading knowledge could help, that would be great. Anyways, just a quick trade idea that exploits an easy trend to follow.

Cheers
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