Pairs Trading: Quantitative Methods and Analysis

by Ganapathy Vidyamurthy.
I just ordered this book the other day after having read a pdf version for about a month.
While even after having read alot of this I would not want to get into pairs trading this is an excellent introduction to the "quant" side of trading. In some sense this could be titled "Statistical Arbitrage for Dummies" or "Financial Time Series Analysis for Dummies". While to be useful one would have to understand rather heavy math/stats, this is the only text I've found that focuses on explaining the concepts rather than explaining things mainly via equations/models. If anything this book has inspired me to become numerate. The most interesting aspect of this book is none of this stuff really comes up on retail message boards and the quant boards are mostly filled with discussions on derivatives/exotics and their price models rather than the basic statarb stuff.
I read in Trader Magazine about a trader who trades outright directional plays but uses a statarb model with only taking one side of the trade. This could be a very interesting area to explore and this is the best introduction to that kind of trading.