Long/Short Equity

Long/short equity is an investment strategy used by hedge funds and other active investors that involves taking long positions in stocks expected to rise in value and short positions in stocks expected to decline. The goal is to generate returns regardless of market conditions by capitalizing on both upward and downward price movements. Long/short equity strategies aim to mitigate market risk by balancing long and short positions, potentially earning profits even in volatile markets.

Example

A hedge fund holds long positions in tech stocks expected to outperform while simultaneously shorting energy stocks expected to decline, using a long/short equity strategy.