What is the point/benefit of using a dollar-neutral strategy in addition to a Beta-neutral strategy? What exactly does a dollar-neutral strategy buy the investor? What's useful about balancing long and short positions?
Using the notation in Qian et al.'s book, in the mean-variance optimization problem, why would an investor force:
$w\cdot I = 0 $ in addition to $w \cdot B = 0 $ ?
- $w$ being the portfolio weights
- $B$ being the exposure matrix