Statistical Arbitrage(redirected from Stat arb)
In the context of hedge funds, a style of management that employs complex statistical models that try to capture small abnormalities in a security's intraday return.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
An investment practice that attempts to profit from inefficiencies in price by making transactions that offset each other. For example, one may buy a security at a low price and, within a few seconds, re-sell it to a willing buyer at a higher price. Arbitrageurs can keep prices relatively stable as markets try to resist their attempts at price exploitation. Arbitrageurs often use computer programs because their transactions can be complex and occur in rapid succession.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved