You manage a $$15$ million hedge fund portfolio with beta $=1\mathrm{.}2$ and alpha $=2\%$ per quarter. Assume the risk$-$free rate is $2\%$ per quarter and the current value of the S&P $500$ Index is $1,200.$ You want to exploit the positive alpha, but you are afraid that the stock market may fall and you want to hedge your portfolio by selling $3-$month S&P $500$ future contracts. The S&P contract multiplier is $$250.$

Hedging this portfolio by selling S&P $500$ futures contracts is an example of $\_\_\_\_\_\_\_\_\_\_.$

Multiple Choice

statistical arbitrage

pure play

a short equity hedge

fixed$-$income arbitrage