Before revision:  The spread between a model and its arbitrage-free regularization is then used to construct a mis-pricing detection or classification algorithm, which is in turn used to develop a pairs trading strategy. Our theory provides a sound theoretical foundation for a risk-neutral pricing theory capable of handling models which potentially admit arbitrage but which can which can be deformed into arbitrage-free models .
After revision:  The spread between a model and its arbitrage-free affine term-structure modelling. Numerical implementations are also performed to evaluate the performance in the bond market .