Would it be possible to design a market neutral strategy without short selling?

According to Investopedia:

Market-neutral strategies are often attained by taking matching long and short positions in different stocks...

According to here:

Market Neutral investing is also possible without (...) short selling

How is this possible?

  • 2
    $\begingroup$ Cash :) To find a less trivial example what do you mean with market neutral, with respect to what market index / asset class? $\endgroup$
    – user34971
    Commented May 7, 2020 at 9:58
  • 1
    $\begingroup$ If you're thinking about equity investing and define market neutral as $\beta = 0$ you could invest in negative beta stocks. $\endgroup$
    – Bob Jansen
    Commented May 7, 2020 at 10:31
  • 3
    $\begingroup$ Cash is market neutral. You can also use derivatives which allow to be (approximately) market-neutral if the strategy is well-constructed (such as Futures, options, or inverse ETFs). You can also perform statistical analysis to identify stocks with negative beta. $\endgroup$ Commented May 7, 2020 at 11:02
  • $\begingroup$ @DaneelOlivaw What do you mean 'cash'? $\endgroup$
    – Alfonso_MA
    Commented May 7, 2020 at 11:14
  • 1
    $\begingroup$ Basically your local currency invested in some bank deposit or very short-term monetary instrument which yield interest close to risk-free. That is not exposed to market variations. $\endgroup$ Commented May 7, 2020 at 11:58


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