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What types of investment strategies do hedge funds use?

Curious about hedge funds

What types of investment strategies do hedge funds use?

Hedge funds can use a wide variety of investment strategies, which can range from conservative to highly aggressive. Some of the most common strategies used by hedge funds include:

1. Long/short equity: This strategy involves taking both long and short positions in stocks, with the goal of profiting from both rising and falling prices.

2. Eventdriven: This strategy involves investing in companies that are undergoing significant events such as mergers and acquisitions, bankruptcy, spinoffs, or other corporate events.

3. Global macro: This strategy involves taking positions in various global markets, including stocks, bonds, currencies, and commodities, based on macroeconomic trends and geopolitical events.

4. Quantitative: This strategy uses mathematical and statistical models to identify trading opportunities based on patterns in market data.

5. Arbitrage: This strategy involves taking advantage of pricing discrepancies between different markets or different securities within the same market.

6. Distressed debt: This strategy involves investing in the debt of companies that are experiencing financial distress, with the goal of profiting from a potential turnaround.

These strategies are not exhaustive, and hedge funds can use a combination of them or employ other strategies to achieve their investment objectives.

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