Equity market neutral

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Equity market neutral strategies, associated with hedge fund investing, seek to exploit factors unique to particular stock by staying neutral on factors that reflect broader conditions in the sector, industry, level of market capitalization, country, or region.

The strategy achieves its end by with a Long / short equity position within a single sector or asset class. By hedging a long position in a single sector-specific stock with a short position in the same sector, for instance, the equity market neutral investor will not be affected by sector-wide volatility. It is, in essence, a bet that one security will outperform another security, regardless of the strength of its sector or asset class.[1]

This was the strategy of the paradigmatic hedge fund run by Alfred Winslow Jones between 1949 and 1966.

Jones and his equity market neutral strategy were profiled in an article in Fortune magazine, 1966, by Carol Loomis, The Jones nobody keeps up with. He had managed to keep his methods out of the public eye until that point.