Biggest differences between market neutral and MM?
Trying to understand how a market neutral fund's strategy would be different from the MM pod groups.
I have an interview with a market neutral fund but have heard they have a longer time horizon than most. I assumed most of the investment style at pods is rank ordering / relative trades with maybe a handful of longer bets, but still mostly pair trades and focusing on nailing the quarters + more active trading style. How would a market neutral fund with longer duration differ from the pod groups? I guess for the purpose of interviews it may not matter that much though (just don't want to pitch the wrong ideas)
If helpful from what I have seen, maybe some pods let you run net long a bit if you want
What's similar is that you have tight risk limits and use of leverage.
What's different is that in one you try to be market neutral (by taking a view on single sectors/names vs others) while the other tends to be more directional & exposed to market fluctuations. Although as said before, tight risk limits don't usually allow for that much of a fluctuation in your PnL.
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