I am wondering what is the cost of long-short strategy, since the short proceeds can not be used to long the stock and need to deposit to buy the treasuries, does that mean if I want to long $1000 stock A and short $1000 stock B of similar beta, i need to prepare $2000?
No up to $1000 only. The short proceeds are invested as collateral / margin for the stock loan. If the short side position(s) go against the investor i.e. the prices rise then the investor may be required by the dealer to post more margin depending on the volatility of the stock . The long would be a typical purchase ( could be investor pays less , say 50% of the value of the long position, balance taken as loan ). So initially the investor would shell out $500- $1000 and maybe more when the prices rise.