the spy etf is cap-weighted and therefore has benefited from the recent rise in the largest tech stocks. a possible pairs trade is to compare the spy vs its equal-weight version, rsp. if you compare the relative performance between the 2 etfs, they usually trade in a close range relative to each other. since about mid-march, spy has taken off. the pairs bet is they will return to the mean. during the the last 2 weeks this trade wasn't looking too good, but it's now starting to normalize.
