Common hedge fund strategies include long/short equity, market-neutral, event-driven, relative value arbitrage, global macro, and fixed income arbitrage. Long/short equity involves taking both long and short positions in stocks and other securities. Market-neutral seeks to generate profits regardless of market direction by taking offsetting long and short positions. Event-driven strategies capitalize on corporate events such as mergers or acquisitions. Relative value arbitrage exploits mispricing between related instruments.
Global macro strategies seek to profit from macroeconomic trends in different countries or markets. Fixed income arbitrage captures price differences between debt instruments of varying maturities or different credit quality.