A strategy of allocating funds within a portfolio using derivatives to neutralize the market risk inherent in this portfolio. It aims to obtain alpha returns while neutralizing the market risk. A portfolio manager or investor can generate alpha from any asset class through dedicated alpha-engines or vehicles. An investor may have a beta exposure to the bond market but would attempt to generate alpha from the equity market. In this case, the alpha is said to be portable from the equity market and placed on top of the bond portfolio. A hypothetical trade applying portable alpha may involve taking a long position in a country- or geographic area-specific portfolio, and a short position in one domestic futures index, while shorting a foreign futures index. In this sense, portable alpha allows investors and managers to add value to their portfolios from other sources.

This strategy is also known as alpha transport.