Modules for Traders
Translate the power of knowledge into action. Open Free* Demat Account
What are the benefits of pair trading?
00:55 Mins Read
This video discusses the 3 main benefits of the pair trading strategy.
Pair trading gives you 3 main benefits. Firstly, you have the potential to generate returns no matter which way the overall market moves. Secondly, every pair trade inherently mitigates risk. Even if one stock performs differently than expected The other stock can help make up for some of the losses. And finally, pair trading comes with a degree of certainty. Two assets that have a good historical correlation will most likely converge again after a divergence. These advantages make pair trading suitable for different types of traders. Want to learn more about the technical details of pair trading? Head to the next chapter in this module to learn about pair trading stats.