A pair trade is a trading strategy, in which a long position is matched with a short position in a pair of highly correlated instruments such as stocks, options, commodities and ETFs.
It's essentially buying an instrument, which may be considered and underperformer, and selling another instrument belonging to the same sector, perceived to be an outperformer.
This strategy helps one to make profit even when the market retreats, as only the relative performance of the paired instruments matters.
MKM Partners recently identified one buy and one sell from each sector based on the stocks relative trend to the sector.
MKM's Pair Trades
(first stock listed as a Buy, second stock listed as a Sell)
MKM Partners clarified, regardless of the primary trend of the market, there are always different stocks in each sector that show relative strength and weakness. For long-short players, the firm thinks the above pairs offer attractive set-ups as pair trades.
See Also:
The '$5 Threshold' Trading Strategy Explained
The Fair Value Trading Strategy, Explained
Carter Worth And Mike Khouw's Coca-Cola Trade
© 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
To add Benzinga News as your preferred source on Google, click here.
