Stat arb is not really arbitrage. It is typically a heavily levered bet that deviations from usually observed relative price relationships are temporary. Arbitrage is term that is way overused in the marketplace. Used in this context it is like putting lipstick on a pig - it may look nicer to some, but a pig is still a pig. True arbitrage literally means getting something for nothing, that is a very, very rare thing.Here is my favourite definition of arbitrage (alas, I lost the source and cannot give credit to who wrote it):1. Two portfolios can be created that have identical payoffs in all future states of nature but have different costs;2. Two portfolios can be created with equal costs, but where one portfolio has at least the same payoff in all future states of nature and a higher payoff in at least one future state of nature;3. A portfolio can be created with zero cost that has a non-negative payoff in all future states of nature and a positive payoff in at least one future state of nature.Now ask yourself, what has this to do with "statistical arbitrage"?