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29 Σεπ 2020 · In finance, a perfect hedge is an investing strategy intended to protect an investment or portfolio against all losses. It usually involves securities that move in the opposite direction than the asset being protected.
28 Μαρ 2023 · A perfect hedge is a position that eliminates the risk of an existing position or one that eliminates all market risk from a portfolio. Rarely achieved,...
Definition. Perfect hedging is a risk management strategy that eliminates the risk of an adverse price movement in an asset by taking a position in a derivative that perfectly offsets the exposure to that asset.
A hedging investment/ position which completely eliminates the risk of another existing investment/ position. For example, a call option can be perfectly hedged against unfavorable movement in the the underlying price by buying and holding the underlying asset (e.g, long stock).
A hedge where the change in the price or rate of the hedging device is exactly contrary to the change in the price of the underlying. Every hedger's dream. From: perfect hedge in The Handbook of International Financial Terms »
16 Σεπ 2023 · A perfect hedge is a position by an investor that dispenses with the risk of an existing position, or a position that wipes out all market risk from a portfolio. Rarely accomplished, a perfect hedge position necessities to have a 100% inverse correlation to the initial position.
30 Ιουν 2021 · Payoffs from a “perfect hedge” are 100% inversely correlated to the financial risk in one’s portfolio; however, perfect hedges rarely exist in practice. Instead, portfolio managers tend to think in terms of “percent hedged”, which is a different concept altogether.
