pairs trading matlab

good Morning

I would like to ask if anyone could give me some information about the operation of certain parts of the code.

Is this part of the code is a regression?

% The strategy:
% 1 Compute residuals over next N days
res = series2 (i: i + N-1, 1) ...
- (Reg1.coeff (1) + reg1.coeff (2). * Series2 (i: i + N-1, 2));

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I am not clear what this is part of the code, will mysteriously kindly explain

% 2 If the residuals are large and positive, then the first series
% Is Likely to decline vs. the second series. Short the first
% Series by a scaled number of shares and long the second series by
1% share. If the residuals are large and negative, do the
% Opposite.

indicated (i: i + N-1) = res / reg1.RMSE;

s (i: i + N-1, 2) = (res / reg1.RMSE> spread) ...
- (Res / reg1.RMSE <-spread);
s (i: i + N-1, 1) = -reg1.coeff (2). * s (i: i + N-1, 2);
end
end

Thank you again for your great cooperation