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Finance Dictionary and Glossary of Investment Terms
statistical arbitrage
Definition 1.
An attempt to profit from pricing inefficiencies that are identified through the use of mathematical models. Statistical arbitrage attempts to profit from the likelihood that prices will trend toward a historical norm. Unlike pure arbitrage, statistical arbitrage is not riskless.
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Definition 2.
A profit situation arising from pricing inefficiencies between securities. Investors identify the arbitrage situation through mathematical modeling techniques.
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