eg: If you think NVDA is overvalued relative to the overall tech sector, you could short NVDA, go long QQQ.
And if you have a more opinionated trade in the same currency, eg: you think AAPL will be fine if the AI trade pops, you can do short NVDA, long AAPL.
Finally, an even more advanced version would be to go long on something else in the same sector, but which is less overvalued in your opinion. eg: Short ORCL, long NVDA.
Positions are not necessary to be single transaction. They can be multi-step trade.
For global currency risk (meaning on USD), You will have to hedge your shorts with a non currency long position which historically hold value during defaults/ runs etc. Assets like gold (ETFs/Gold bars) or real estate (REITs or physical land holdings) or rights to commodity revenue like oil, copper etc [1].
If the currency risk is not for USD, then mix of other currencies particularly USD would work well as as hedge.
Currency risk is independent of shorting, i.e. it is risk in Long positions as well, current may inflate faster than your position increases in value etc.
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[1] Commodity come with additional shorter term market volatility and risks - due their own supply/demand volatility and depend performance of economy.
However after assets like Gold, they will have highest correlation of returns against inflation as long the economy doesn't completely crash, because the demand for them is foundational
