Paired Trades and Hedging Strategies Message Board

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Non-Tech : Paired Trades and Hedging Strategies

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From: Biomaven	10/5/2004 2:29:15 PM
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The first paired trade I would like to suggest is long AMD and short INTC (a trade I've had for a few months now). There is currently a huge discrepancy between the two companies in all the valuation metrics such as price/sales ratio, even though AMD is currently growing much faster than Intel. The reason for this is historical - INTC has traditionally been very profitable indeed, while AMD has not. Intel has always been able to cut prices where AMD was technically strong and keep prices high where AMD was weak. Those days seem to be over - AMD is matching or surpassing Intel technically across the board, with Centrino perhaps the last bastion remaining, and that perhaps about to be challenged. Obviously we can't re-hash the entire AMD thread here, but comments on the paired trade aspect are welcome. Peter

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