Pairs Trading

Many of you know, in May, I asked Dennis V. Leontyev to take over HOTS. There were a number of reasons for that decision. But the most important one had to do with our desire to have consistently positive absolute returns for HOTS. I had heard the work Dennis had done as a $100 Mil hedge fund co-manager and I was very impressed by the low volatility of his returns thus achieving a very high Sharpe Ratio for his fund -- something that we were missing previously in HOTS.

After reviewing Dennis ' real-time HOTS recommendations by eSignal Senior Management, they subsequently requested an article for their Exchange Newsletter , which I have attached below for your reading pleasure. ( http://www.esignalcentral.com/exchange/07_2005/default.asp ) Do not miss it...........

and, HAVE a GREAT FOURTH of JULY.

all the best, Fari