10 Strategies Hedge Funds Use to Make Huge Returns

4. Long/Short Equity

This is one of the 10 strategies hedge funds use to make huge returns. The strategy is based on the idea of buying long equities, with the expectation of increasing value and of selling short equities, with the expectation of decreasing value. It is known as a long/short ‘pair trade’. To make a huge return, the hedge funds should effectively predict the performance of stocks.