If you're long $10,000 of TNA for example, an almost perfect hedge is being long the same dollar amount of TZA provided you rebalance daily and for practical purposes your downside will be things like how well you execute the rebalancing, commissions and slippage. If you don't rebalance daily you can easily lose a lot more ($ thousands). You might also make money but the odds are greater you'll lose.
I'm trading a basket of 50 small cap stocks (R2000 components) and hedge 1:1 with Russell 2000 futures on a Dollar volume basis. That captures the relative under/outperformance of my 50 stock basket against the R2000. Careful with "market neutral". There's Dollar neutral, beta neutral and God knows what. If your stocks tank more than the index.. you lose; obviously you win vice versa.