You are hereSuperValu May Soon Have Its Day
SuperValu May Soon Have Its Day
SeekingAlpha.com, by David Sterman, December 13, 2010
The rules of a paired trade are quite simple. Find a good company and make a bullish investment while also finding a lousy company in the same industry and make a bearish short investment against it.
That logic surely applies when two companies appear comparably valued. But what do you do when the solid operator appears quite overpriced and the lousy operator appears to be far too cheap? Well, you have to turn the paired trade theory on its head.