Long/Short Strategy in oil.

There is an anomaly in the UK to US oil ratio. It is almost 3 std away from its 100-day simple moving average . This means that UK oil is undervalued relative to the US counterpart. At this situation, shorting US oil and buying UK oil with the appropriate position sizing ( such that every percent move will give the same profit/loss) is sensible.
Trade active: After 11 days, USOIL and UKOIL gained 2.07% and 4.10% respectively. Since we shorted USOIL and bought UKOIL our net gain till now is 2.03% percent. But since the ratio is not still normal, I am willing to wait a little more.
Trade closed: target reached: When we opened this position: UKOIL = 71.16 (long) , USOIL = 63.38 (short).
Now , since ratio is normalized, it is reosanable to close the position and prices for oil are 68.68 and 58.63 in respectively. Calculating the percent profits, we got -3.485% for UKOIL (since it was long position) and +7.493 for USOIL (since it was short position). And our Net profit is (excluding fees) +4.01 % .


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