Definitions for "market neutral"
An investment strategy that aims to produce almost the same profit regardless...
A market neutral fund takes independent long and short positions and removes market risk by ignoring direction. The aim is to identify an asset which will outperform another asset, in whichever direction. This is a radical departure from investing in direction. A market neutral fund takes investment decisions in pairs. The idea is to find a pair of assets whose price movements are related, then go long the outperformer and short the underperformer. To be market neutral, the same cash amount is invested in both positions.
An investment strategy which seeks to hedge away exposure to the broader equity market (beta, q.v.) and achieve excess return (q.v.) solely through positive alpha (q.v.). Also known as a long/short strategy.