Possible Stat Arb on Bombardier and Textron

Bombardier and Textron are in the same industry, and have almost identical creditworthiness according to the CDS market:



Their shares, too, have moved in tandem. The linear regression of their share prices shows a correlation of 89%:



Still, today's point if far from the regression line, suggesting that the shares of Bombardier are rich relative to those of Textron. Specifically, it suggests being long 0.129 shares of Textron for each share of Bombardier shorted. According to this model, if Textron's shares don't move, Bombardier's should retrace from about $4.5 to about $4; if Bombardier's shares are unchanged, Textron's may revert to its trend line, from about $18 to about $22. Any other scenario reverting to the red regression line is of course possible as well, and would also generate a profit.