Volatility in stock markets evokes varying responses from market participants. While some perceive it as opportunity to make money, others perceive it as a threat and start unwinding their positions. In today's globalized environment, increased volatility reflects not only the domestic...

The paper applies machine learning tools in pairs trading. Three different algorithms, namely, Support Vector Machine (SVM), Random Forest (RF) and Adaptive Neuro Fuzzy Inference System (ANFIS), have been used for predictive modeling of the value of the ratio of share prices of pairs of...