What is the core concept behind pair trading?

"Identifying companies with identical stock prices" "Predicting future stock market trends" "Exploiting price discrepancies between related assets" "Investing in companies with high growth potential"

Which of the following terms is NOT used to describe pair trading?

"Relative Value Trading" "Statistical Arbitrage" "Market Neutral Strategy" "Quantitative Trading"

Why is pair trading NOT considered a market neutral strategy?

"It involves taking long and short positions in different assets" "It relies on predicting market movements" "It focuses on companies in the same industry" "It requires extensive capital investment"

What kind of event can create a trading opportunity in pair trading?

"Global economic recession" "A company announcing its quarterly results" "Changes in government regulations" "Fluctuations in currency exchange rates"

What is the primary focus of pair trading?

"Maximizing short-term profits" "Minimizing investment risk" "Capitalizing on price differences between related securities" "Diversifying investment portfolios"