Engineering Alpha

Engineering Alpha

Using Z-Score in Trading — A Python Study.

Creating a Trading Strategy Based on the Z-Score Indicator.

Sofien Kaabar, CFA's avatar
Sofien Kaabar, CFA
Sep 23, 2021
∙ Paid

Normalization is a technique that scales the time series and attempts to make it stationary. Normalization can take many forms, among them, the z-score method which is the protagonist of this article. We want to see what is z-score, how to code it, and how to use it in trading.

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