Boons, MartijnAlmeida, Gustavo Filipe Direitinho Nunes de2015-04-092015-04-092014-05http://hdl.handle.net/10362/14650This paper designs a pairs trading model with the intent to identify existing profitable market opportunities to invest, i.e. traditionally strong correlated stocks that have diverged from its historical norm. It comprises a broad literature review on this strategy whose relevant findings (strategy improvements) are contemplated in the model. The authors combine the statistical results of the model with a backtesting analysis in order to provide guidance on the best investment opportunities.engPairs tradingInvestment modelingStatistical arbitragemaster thesis201528363