Hedge Ratio Calculator
How the Hedge Ratio Calculator Works
The Hedge Ratio Calculator is a practical and user-friendly tool designed for investors, whether you’re a beginner or a seasoned pro. Here’s a step-by-step guide on how to use it:
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Input Portfolio Value: Begin by entering the total value of your investment portfolio or the specific investment you want to hedge.
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Input Contract Value: Specify the value of each futures or options contract that you intend to use for hedging.
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Calculate Hedge Ratio: The calculator will instantly compute the hedge ratio by dividing the portfolio value by the contract value. This ratio represents the number of contracts required to hedge your investment effectively.
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Minimize Risk: Use the calculated hedge ratio to establish a balanced hedging strategy that aligns with your risk management objectives.