So I'm wondering how much hedging do market neutral L/S funds actually do?
I mean, there are some funds that claim to be market neutral but they seem to hold a basket of 10-20 longs and balance that out with some shorts (not necessarily with considerations to beta).
Then there's the other extreme where I guess you can hedge out everything that has an etf (would you?).
I'm curious, what are the main risk factors that market neutral funds hedge out?
How does this change for L/S managers vs. stat arb funds?