Overview

Updated in May 2025. This course now features Coursera Coach! A smarter way to learn with interactive, real-time conversations that help you test your knowledge, challenge assumptions, and deepen your understanding as you progress through the course. In this course, you will learn how to effectively use ChatGPT in financial analysis, specifically focusing on pairs trading. By the end of the course, you will be equipped with the skills to automate parts of your trading strategy, test its effectiveness, and make corrections using the power of AI. The course begins by introducing you to pairs trading, an essential concept in finance. You'll gain an intuitive understanding of its foundations, such as the underlying rationale, advantages, and how to begin implementing it. As you proceed, you will learn how to craft the right prompts to use ChatGPT for pairs trading and test the strategy using historical data. You’ll also dive into more technical aspects of pairs trading, including correcting trading signals, Z-score computations, and return calculations. This knowledge will empower you to optimize strategy performance, address issues like spread discrepancies, and handle errors in real-time. The course also covers advanced topics like benchmarking against buy-and-hold strategies and implementing long-only positions. This course is ideal for individuals with a basic understanding of trading and financial analysis who want to use ChatGPT to enhance their trading strategies. It’s suitable for anyone looking to improve their quantitative finance skills and gain practical experience in AI-assisted financial decision-making.

Syllabus

Welcome

In this module, we will introduce the course objectives, outline the scope of the project you will be working on, and provide an overview of the tools and resources you will need to succeed.

Getting Set Up

In this module, we will explore key strategies for succeeding in this course and guide you on where to find the code needed for your project. These foundational steps will ensure you are well-prepared for the journey ahead.

Pairs Trading with ChatGPT

In this module, we will delve into pairs trading, beginning with understanding its core principles and intuition. You will learn how to leverage ChatGPT for developing and refining trading strategies, correct various aspects of these strategies, and measure their performance. Additionally, we'll explore advanced topics such as log returns, long-only strategies, and iterative improvements using feedback and suggestions.

Sanity Check

In this module, we will focus on validating the robustness of our trading strategies. You'll conduct a mean reversion test to verify the foundational assumptions and a pairs trading test to ensure the practical reliability of the strategies developed in the previous sections.

Course Summary

In this module, we will conclude the course by summarizing the key lessons and insights you have gained. Additionally, we will reflect on how ChatGPT has contributed to personalizing your learning journey, enhancing your understanding and application of pairs trading strategies.