Different Hedging Strategies

Well, not necessarily if you have a decent "short edge", there is no reason why your short trades wouldnt be as profitable as your long trades. At the same time, even if your short trades are slightly less profitable than your long trades overall, they may still be worth the benefit of being market-neutral and reducing volatility in your portfolio...
 
Quote from sbs17:

By having half your portfolio on the short side aren't you putting yourself at a disadvantage since the markets tend to rise in price overall?
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That depends. The goal is to reduce the influence of the broad market movement and to focus performance on absolute decision making. So it all comes does to proper stock picking (or currency, index etc). It also results in reduced volatility as in the case of a market downturn one isn't fully exposed.
 
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