What Is the Difference between Triangular Arbitrage and Statistical Arbitrage?
Triangular arbitrage is a deterministic strategy that profits from a price inconsistency among three different currencies or assets. It involves a sequence of three trades to end up with the initial currency but in a greater amount.
Statistical arbitrage is a non-deterministic strategy that uses quantitative models to exploit temporary, statistically significant price deviations between related assets, often involving a large number of assets and a mean-reversion assumption.
Glossar
Statistical Arbitrage
Convergence ⎊ Statistical arbitrage within cryptocurrency, options, and derivatives markets exploits temporary mispricings arising from inefficiencies across related instruments.
Arbitrage
Exploitation ⎊ Arbitrage, within cryptocurrency, options, and derivatives, represents the simultaneous purchase and sale of an asset in different markets to capitalize on transient price discrepancies, effectively a risk-free profit opportunity.
Triangular Arbitrage
Arbitrage ⎊ Triangular arbitrage, within the context of cryptocurrency derivatives and financial markets, exploits temporary price discrepancies across three distinct markets or exchanges for the same underlying asset or related instruments.