Pair Trading is a strategy that takes positions in two stocks that have historically moved together, buying one and shorting the other when they get statistically far apart, with the purpose of seeing them move back into their historical average. The benefits are should the market make a strong one way move, you are "hedged" since one side of your pair will be on the same side of the market move. The market can move sharply and your pair can barely budge, with the attention being to move in your favor no matter the direction of the market.