Mean-Reversion Section 2 Unit 4 and 5 error!

Quant Trading Strategies & Ideas
1

Considering that any graph has Y(dependent variable) and X (independent variable).



The video in unit 4 at 1min 02sec shows a graph GDX (y axis) vs GLD (x axis)

 

and later gives strategy as



GLD(long) - 1.63* GDX(short) aka



Independent - hedge ratio*  dependent



but when we go to unit 5 (objective question) data says  :



independent variable is Exxon Mobil Corporation (XOM)

dependent variable is Chevron Corporation (CVX)

Ratio 5



Hence final answer should be 

XOM - 5 * CVX



But the answer says 

CVX - 5* XOM and 

the hint (rationale) says 

A portfolio is formed as dependent - hedge ratio * independent 



Hence there is contradiction between concept shown in video (unit 4) and answer in unit 5







Please address this at the earliest













 

2

Hi Ambooj,



Thank you for the feedback.



We have rectified the graph. Now the graph shows GDX on the x axis and GLD on the y axis as discussed in the strategy.

3

also at 5:06 secs it needs to be done again!



and it also repeats at CADF video at 1:11

4

This has been changed.