Long Short Equity Strategies: "Hedging" Your Bets Resilience Long Short Equity Strategies: "Hedging" Your Bets August 08, As monetary policy normalizes quantitative investment strategies and market volatility increases due to inflation and other concerns, investors may be seeking ways to add resiliency to their portfolios.
It could therefore be an opportune time to consider the inherently risk-mitigating characteristics of long-short equity strategies.
As the name suggests, long-short equity strategies invest both long and short in publicly traded equities and equity-related instruments. Compared to their long-only counterparts, long-short strategies are designed to have lower sensitivity to equity market movements, as measured by beta, volatility and drawdowns. When included investieren in kryptowährungsbücher part of a broadly diversified portfolio, such strategies have the potential to: 1 generate profits from their long and short positions and 2 provide an element of risk mitigation, or hedge, when markets decline because gains on short positions will dampen losses on long positions.
Short selling involves borrowing shares and selling them at a certain price on the assumption that the price will decline, allowing Kryptoinvestitionen für 2021 seller to buy shares back at a lower price and return them to the owner. Short selling is only profitable when share prices decline and may be exposed to steep losses if share prices rise.