// Structural Long–Short · for asset owners & allocators
The industry trades factors. We isolate the spread benchmark design leaves behind.
~30
structural spreads monitored
4–10
active spreads at any time
6–8%
target annualised volatility
$10B+
estimated strategy capacity
A systematic, dollar-neutral strategy built on the 3N™ methodology — offered as a partnership
// The one thing to know
A market-neutral strategy that earns the gap between a redesigned, scientific portfolio and the winner-biased, concentrated index it replaces.
Long the 3N™ allocation, short its cap-weighted benchmark — the same universe, built two opposite ways. The performance spread between the two is the product. No leverage. No forecasts.
01 The structural opportunity
Cap-weighting is a single bias, compounding. 3N is many, balanced.
Cap-weighted benchmarks allocate by market value — so as a price rises, its weight rises, and index flows buy more of it. Concentration reinforces itself. The 3N allocation instead distributes exposure across probabilistic bias states and rebalances structurally across regimes. The performance spread between the two construction systems is what SLS harvests.
LONG LEG · 3N™
The multi-bias allocation
Treats the market as a closed statistical system of interacting biases — persistence, reversion, dispersion, concentration — and distributes exposure probabilistically across them.
SHORT LEG · MCAP
The winner-bias machine
Allocates by market value: as a price rises its weight rises, and index flows buy more of it. Concentration is self-reinforcing — a single bias, compounding.
02 Same universe. Opposite construction.
The difference between the two is the trade.
EXHIBIT — Same universe, two weight curves
Illustrative. The gap between the curves is the structural spread.
Spread = R3N − RMCAP
Because both legs draw on the same large-cap universe, the spread reflects construction methodology, not asset selection.
The spread is not a factor — it is the difference between two ways of building the same portfolio, and factor crowding cannot arbitrage it away.
03 Convergence logic
We wait for the spread to dislocate — then position for it to converge.
A drawdown in the spread is a temporary divergence between two allocation systems — not a permanent regime shift. History suggests these dislocations tend to normalise over a bounded window. The strategy captures that reset with discipline, not discretion.
01 · SIGNAL
Drawdown threshold
A spread becomes eligible only after a statistically significant drawdown — roughly 5% for broad exposures, 10% for sectors.
02 · ENTRY
Dollar-neutral
Long the 3N allocation, short its cap-weighted benchmark, balanced at entry — minimal directional exposure.
03 · HOLD
Convergence window
Held through a spread designed for convergence — an average of ~120 days — with no intra-period tinkering.
04 · EXIT
Systematic reset
Exited at the end of the window regardless of interim performance — a disciplined structural reset, then re-armed.
No leverage · no intra-period hedging adjustments · no discretionary intervention. Every position follows predefined entry, holding and exit rules.
04 The portfolio engine
A rolling book of overlapping spreads — never one concentrated bet.
The engine monitors ~30 structural spreads across sectors and geographies — the 11 sector SPDRs plus broad exposures like QQQ, OEF and TSX 60, expanding toward the most liquid global ETFs.
At any time 4–10 spreads are active and equally weighted. As earlier positions reach the end of their window they exit and free capacity — a continuous, overlapping book that keeps the payoff diversified.
EXHIBIT — Overlapping convergence windows
Illustrative. Entries and exits are continuous; 4–10 run concurrently.
05 The intended return profile
A return stream that doesn't move with the market it's drawn from.
EXHIBIT — Shape of the payoff · illustrative, not a forecast
Illustrative shape only. Not a simulation, forecast or track record.
Near beta-neutral
A payoff largely uncorrelated to equity direction — a diversifier alongside a long book, not another way to own it.
6–8% target volatility
Sized for a controlled, institutional risk budget — no leverage used to manufacture return.
Verified figures under NDA
The illustration shows intent. Robustness testing and realised figures are shared with qualified recipients under agreement.
06 Signal quality · backtested 10 years since Jan 2015
A consistent signal — not one that leans on a few outliers.
76.3%
signal win rate across closed trades since 2015
~89%
peak win rate in the most-populated bucket (91–120 days)
+11.2%
median annualised return per closed trade
26.4pp
interquartile range — the middle 50% of trades spans just 26.4 points
EXHIBIT — Middle 50% of trade outcomes, annualised
Box = interquartile range (middle 50% of closed trades), line = median, annualised per trade. Trades held beyond a year averaged +15.4% absolute — the edge builds with duration. Source: AlphaBlock backtest research, June 2026.
IMPORTANT — BACKTESTED, HYPOTHETICAL RESULTS. Not actual trading; no capital was at risk; prepared with the benefit of hindsight. Excludes trading, financing and borrow costs, slippage, taxes and liquidity constraints, and will differ materially from realised performance. No representation is made that any account will achieve comparable results.
07 Risk architecture
Neutrality is built in — not managed after the fact.
01
Dollar-neutral & unlevered
Long and short begin with balanced capital exposure; the strategy operates without leverage, keeping the return profile transparent.
02
Liquid ETF short leg
The benchmark leg is implemented through highly liquid ETFs, with borrow-feasibility screening before any position is initiated.
03
Large-cap universe only
Positions sit in deep, liquid large-cap exposures — enter and exit without material market impact, with sector concentration monitored continuously.
04
Mandatory reset
Every position exits at the end of its window. Any beta drift during the hold is accepted as part of the structure and reset systematically at expiry.
08 What this is not
Clear boundaries — so your committee knows exactly what it's approving.
NOT
A discretionary long–short book picked by subjective judgement.
NOT
A factor-timing or style-rotation strategy driven by forecasts.
NOT
A continuous hedge that adjusts exposures with every market move.
NOT
A leveraged strategy that amplifies returns with borrowed capital.
NOT
A high-frequency system chasing microstructure inefficiencies.
IT IS
A rules-based benchmark-spread convergence framework — inspectable end to end.
09 Access & common questions
Two ways to run it.
In your own SMA
Run as a separately managed account in your structure — you keep custody and control; 3N supplies the engine.
By licence / partnership
License the methodology into an institutional vehicle. Standardised subscription and redemption; $10B+ capacity.
Is it correlated to my equity book?
By design, no. Dollar-neutral construction targets a near beta-neutral payoff that diversifies a long portfolio.
What's the capacity?
Estimated $10B+. Large-cap equities and liquid ETFs keep market impact low as assets scale.
Is it a black box?
No — rules-based and inspectable, grounded in 15+ years of published, peer-visible research. Your team can interrogate every step.
How are you paid?
Nothing upfront. A share of verified alpha on standardised products, or a share of fees on the custom mandates we build with you.
α1phablock
// The next step
See the spread converge on your own universe.
A methodology briefing, then out-of-sample validation on the exposures you care about — before any commitment. If it earns its place, we agree terms and deploy. Terms agreed per mandate.
CONTACT
Mukul Pal · Founder & CEO
contact@a1phablock.com
WEB
a1phablock.com
Signal-quality figures in this deck are backtested and hypothetical — not actual trading, no capital at risk, prepared with the benefit of hindsight, and excluding trading, financing, borrow and slippage costs that would apply to a real account. Where live figures are referenced, they were achieved in regulated portfolios by managers licensed to use the 3N™ methodology — not by any AlphaBlock-managed fund (sources: Nasdaq public index record; SEBI-regulated PMS disclosures). Past and backtested performance do not guarantee future results. This document is for information only — it is not an offer, a solicitation, or investment advice. For qualified recipients only.
