Solution:
Pair 1 is the most suitable for the fund. The compnaies'share prices have been correlated in the past, with the share price ratio reverting to the moving average. They have similar business, and there is no indication of a change in either company's strategies, as there is for Pair 3. By contrast with the price ratio for Pair 1, the past correlation of share prices for Pair 2 may have been spurious and is not described as exhibiting mean reversion.
我理解pair 2 and 3不适合pairs trading. 我不太理解的是，老师视频课上说pairs trading一定是当现在规律被打破且相信将来会回归时，同时long一个和short一个。而pair 1两个公司过去估值相同且呈现均值归回，现在两个公司的ratio都高于均值一个标准差， 那short哪个long哪个？
