Equity Net Neutral funds attempt to limit their vulnerability to market movement by utilizing both long and short positions. Diversification is a must for this strategy to be effective. Holding many equities at once ensures the manager and his investors that no one position can have a disproportionate effect on the portfolio. Short positions are used to hedge much of the systematic risk in the long positions on either a dollar or beta adjusted basis. Equity Net Neutral funds often seek profit by attempting to exploit pricing inefficiencies between related equity securities. An example of this strategy might be building a portfolio containing long positions in the strongest companies in several industries and taking corresponding short positions in those companies showing signs of weakness.