A hedge fund is a private partnership that is known for the alternative methods of investment strategies being used producing excessive return and low risk, compared to other asset classes. Hedge funds come in higher cost, in terms of fees paid by investors. The use of leverage, short-selling and derivative products are mostly responsible for the outcome of the hedge fund strategies. However, measuring the return and identifying the risk factor of each and every strategy confronts with the available data biases that all hedge funds are subject to. The long/short equity strategy answers to more than 40% of the reported hedge funds, in terms of asset under management, mainly due to the lower market exposure and the better relative performance when compared to other hedge funds or the equity mutual funds. By providing descriptive statistical analysis, the results drawn highlight the view that the long/short equity strategy delivers significant return while includes lower risk exposures when compared to other hedge fund strategies. Moreover, five different portfolios with different asset allocation are constructed in order to study the contribution of the long/short equity hedge funds when included in an investment portfolio. Finally, two key papers describing the risk factors of the long/short strategy, employing a linear and a non-linear approach are presented.