Preprint
Sep 2026
Adapting Pairs Trading to Gambling Markets A Case Study of the U.S. Presidential Election
Pairs trading exploits mean reversion in the relationship between related assets. We adapt this idea to political betting markets by modelling the combined implied probability of the two major-party nominees with a latent Ornstein-Uhlenbeck process whose mean-reversion level varies over time and whose observations cont...
Hao-Yu Liu, L. Thomas, Benjamin R. Baer et al.
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