Pairs trading involves buying and selling two related stocks when their prices diverge in the expectation they will move back together over time. This strategy is regarded as less risky than an outright purchase or sale. Implementation varies but the idea is the same - to buy the undervalued pair and sell the overvalued pair.
Examples abound however a good starting point is to chart two related stocks that you have an interest in. This will show you how much they have diverged in the past and how quickly they came back together. The ASX website amongst others allows you to chart two stocks or a stock and an index.