Ratio based position trading?

Currently I'm all in physical, but I'm getting interested in the silver mining stocks. It seems like a good ratio trading position to play through the bull market. I did a bit of analysis relative to Silvercorp. When silver is falling, the silver stocks fall more. When silver is rising, typically the stocks have outperformed. (This is on a longer term basis.) In August of 2007, the silver/SVM ratio was just under 2. In November of 2008, the ratio had moved up to around 4.5. In February of 2010, the ratio had moved back down to around 2.3. Currently, the ratio has moved back up to 4.35.

I'm interested in playing this trade and want to get the opinion of other successful investors. I'd still have my core physical position that I wouldn't plan on touching. What I would do is setup a Tax Free Savings(Trading) Account, and use that to trade. I'm probably buy 3 strong silver mining companies. I'd be looking to sell the stocks when the Silver/SVM ratio gets below 2.5(possibly years from now) and then transition back into bullion with that money.

I like this trade because I wouldn't "miss out" on silver's rise. I would always be in a silver related asset, but I can also play the undervalued overvalued trade between the miners and the bullion.

Love to hear any and all opinions on the subject.