Hedged equity vs equity market neutral

Hedged equity and equity market neutral is seriously confusing.

Someone please shed the light on it.


Hedged Equity- what reading ?

In equity market neutral you have zero systematic market risk exposure, your effectively 100% long and 100% short (stocks technically have to have the same beta), and you try to add alpha by shorting over valued stocks and going long undervalued stocks.

Hedged equity you don’t need to completely eliminate the systematic exposure, so you can take a view on whether the broader market is going to go up or down (either goinh net long or net short).

Alternative investment

Be a little more clear pls- From AI, i think you are referring to Hedged equity REIT ??

Equity REIT since trades on exchange, also exposes the investor to market risk.

If one needs a true exposure to real estate, we need to hedge the market risk away (make beta = 0), you do that by hedging the market risk, such that Hedged Equity REIT is a better representation of underlying real estate.

Market neutral (From Equity Reading) also makes beta = 0

The only common theme between these two concepts is that we are aiming for beta = 0.

purposes are different though

It is from types of Hedge Funds

Then, its the same as long-short mkt neutral HF.


Stand corrected- The main difference between Market neutral and Hedged equity is that

Long short Mkt neutral: Beta = 0

Long short Hedged Equity: Beta not equal to 0. there is some residual market exposure.