Pairs Trade - The strategy of matching a long position with a short position in two stocks in the exact same sector. This creates a hedge against the sector and the overall market that the two stocks are in. The hedge created is essentially a bet that you are placing on the two stocks; the stock you are long in versus the stock that you are short in.
Pairs Trade : the strategy of matching a long position with a short position in two stocks in the exact same sector. this creates a hedge against the sector and the overall market that the two stocks are in. the hedge created is essentially a bet that you are placing on the two stocks; the stock you are long in versus the stock that you are short in.