The beauty of a statistical arbitrage product is that it can be designed to offset the effects of as many of these factors as you desire. The portfolio is already market-neutral by constraining the relation between the long and short portfolios so that the tendency of the long side to follow the market is offset by an equal but opposite effect on the short side. The portfolio becomes inflation-neutral, oil-price-neutral, and so on, by doing the same thing individually with each of those factors. Of course, there is a trade-off: The reduction in risk is accompanied by limiting the choice of
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