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Lecture 35

Long-Short Equity

Introduction

Long-short equity strategies have the advantage of trading many names, and are therefore statistically robust. They also have very high maximum capital thresholds, but also high minimum profitable capital thresholds. The rebalancing, ordering, and other components are fairly modular and should not need to be updated too much. If you have a new investment thesis or pricing model, that can be inserted simply by changing the custom factors and the ranking logic. Later lectures will discuss various components, such as factor analysis, in more depth.

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