If I understand: Alpha Beta: Long S&P futures, hire long/short manager in less efficient market Equitizing long/short: Market neutral (pairs trade) and long S&P futures Is the difference that in the 1st case, the manager already has systematic risk and tries to get alpha but in the 2nd case, he is hedged and tries to get a little systematic risk?
Alpha Beta: invest in index to beta exposure , invest long/short to have alpha, expectation is to earn excess alpha. Equitizing long short: use the funds from short position to have additional long exposure via long futures? as the name says, he is equitizing the money that he has got thru short position. it is additonal exposure I guess…
this has been bugging me too, Alpha beta: base is you have systematic risk, and you add long/short. (which can be market neutral ) Now Equitizing L&S basically you have funds and you have shorted, and use that short fund, to buy systematic risk. well, alpha beta : the money you shorted goes to buy long (used w/in the L&S strategy ) Equitizing L&S somehow the money from short (from market neutral ) is used to buy index (S&P) ? I am not sure but maybe the flow of money seems different. But like I said I dont remember reading about money flow w/in the portfolio.
I think I am wrong… It is more of where you put your shorted funds. . . ?