Equity Market Neutral


Equity Market Neutral

In hedge funds, an investment strategy that involves taking a long position in some equities and a short position on equities in the same industry. For example, a hedge fund may buy an oil company's stock while selling short the stock of another oil company. Theoretically, this reduces risk to the portfolio because stocks in a single industry tend to move in generally the same direction. Thus, a gain on one stock would offset a loss on another.