PAIR TRADE: Long Hotels vs. Short Fast Food & Grocery

Pair Trade!

Buying HLT & H - 4% positions each

Shorting MCD & KR - 4% positions each

Long	Cost Basis	Sell	% Gain/Loss	Short	Cost Basis	Cover	% Gain/Loss
HLT	120.66	120.66	0.00%	MCD	229.91	229.91	0.00%
H	76.64	76.64	0.00%	KR	36.81	36.81	0.00%
			0.00%				0.00%
		TOTAL GAIN/LOSS	0.00%

Thinking of a good pair trade here with inflation and economic boom happening. This seems like a pretty fun trade - to hold for a few days to a week.

Long hotels - they have pricing power and fixed costs. Demand is shooting higher this summer as more people get vaccinated and want to travel. It's almost a long idea itself - perhaps it will be.

Short MCD & KR - neither has much pricing power. Costs are both fixed and highly variable. But raising prices is difficult for both. And demand has already been crazy high and is likely to flatten or decline. I may not want to be short these in a sharply rising market, but with a pair it's not so bad.

I really enjoy pair trades. In all market environments. Usually, I stick to companies in the same industry or use ETFs - but this idea seems like a good one. It's been a while, so remember that I size my pair trades up a few notches from a normal position. And I hope to make 2-5% profit on the trade in about a week.