(I'm quite new to quant finance so I'm not sure if this is an eligible question.)
I've decided I want to backtest pairs trading on the Nordic stockmarket. So I would guess there exists different methods of selecting the pairs (not just guess, I've heard and read some about them). For example the 'most written about' selection based on cointegration which seems most straight forward (which was used by Gatev et al in their paper called Pairs Trading: Performance of a Relative-Value Arbitrage Rule), but also some extended versions of this based on forecasting (tried reading about it but it was a bit to advanced for me). I've also heard about pairs trading calender time (or something like that), which I tried to find some articles about without succeeding (my guess would be that the selection and trades are done 'in calender time', meaning they are based on opening/closing prices rather than intraday. Please correct me if I'm wrong).
So my question is basically what different methods of pairs selection exists? I wouldn't want a full description of them, just some keywords to search (it's hard to find something when you don't really know what you're looking for.. sort of).
Maybe if someone has come across some recent finding in this area or if someone who is actually working with this could give me some ideas on what is 'hot' (meaning what is used in the industry today) it would be great. I tried to contact a few hedgefunds, however they didn't really have time for students (maybe it was naive of me think they would).
Thank you in advance for your help!