I have an equity long/short strategy that works well, but the numbers tend to get weaker whenever there is a sudden burst in volatility. I've done the analysis on 3-4 years of data, and the evidence is statistically significant that volatility bursts associated with one direction in the market are just not my friends. Is the correct way to hedge my risk during vol bursts to buy the VXX/VXZ etf, or is there a better way? Would I look at my "basket" (portfolio) and purchase some sort of combination of options to reflect the volatility of my basket? Or, alternatively, should I take some crude vol-forecasting model and incorporate it into my portfolio? It isn't just the level of the VIX that is the issue, so much as short term shifts in the VIX and evaporation of liquidity that sends me to the poor house. Timing the hedge could also be a problem; seems like smoothing out my equity curve would be easier to do if I stepped aside and went long the VIX. Has anyone worked around this problem? Is it worth my while to work around this issue with a hedge to keep performance satisfactory, or should I just sort of hibernate and wait for vol to revert to some local mean?