Identifying Equity Hedge Strategies

As an investment analyst, you are evaluating a hedge fund that employs various equity hedge strategies. One particular approach focuses on long positions in undervalued stocks while simultaneously shorting overvalued stocks within the same sector. This strategy aims to capitalize on relative price movements.

This hedge fund is known for its significant exposure to both growth and value stocks to enhance total returns while managing risk. The manager's belief is that by using a market-neutral stance, the fund can reduce systematic risk associated with market movements while still capitalizing on stock-specific opportunities.

Which of the following options describes the strategy employed by this hedge fund?