#TradingPairs101 "pair trading" is a statistical arbitrage trading strategy that involves buying and selling two correlated financial instruments. Traders look for pairs of assets that have historically moved similarly but have temporarily diverged. The strategy involves taking a long position (buying) in the underperforming asset and a short position (selling) in the outperforming asset, betting that the "spread" between them will revert to its historical relationship. It is a relative value strategy that is market neutral, aiming to benefit from price convergence while mitigating the overall directional market risk.