The majority -- perhaps the vast majority -- of headge funds are long/short funds.

In the canonical example, if they think that Pepsi will perform well because of some new health products, then they will go long Pepsi and short Coke. The idea is that all the other events they haven't looked at: a crash, currency shifts, people decide sugar is bad for you, NYC soda ban etc will hit both companies equally hard. The only thing they want to bet on is their single hypothesis.

They can't always do this cleanly, but to the extent they can, they diminish some of the risk around the correlation of asset classes.