Market Neutral strategies aim to isolate security-specific returns (alpha) by balancing long and short exposures. This helps minimize beta — or market risk — resulting in performance that is relatively uncorrelated to broader market indices. These strategies are commonly used in quantitative and hedge fund settings, often with pairs trading, sector-neutral portfolios, or factor models. They appeal to allocators focused on absolute return and downside protection. Risk metrics like drawdown, Sharpe Ratio, and Value at Risk (VaR) are vital to monitoring these strategies.