a stat arb PM at AQR told me retail has been using linear regression backwardshe pulled up a chart - not the line, just the residuals below it"that's the trade. not the line, gap between price and the line"everyone's seen a regression channel. nobody looks at what's below itquant uses it to detect when price drifted too far from its own behaviortool is OLS - ordinary least squares, published 1805, chapter 3 of any econometrics textbookhere's how it actually works:1. rolling 20-day regression on