Next Article in Journal
Impending Doom: The Loss of Diversification before a Crisis
Next Article in Special Issue
Goodness-of-Fit versus Significance: A CAPM Selection with Dynamic Betas Applied to the Brazilian Stock Market
Previous Article in Journal
Investigating the Influence of Green Credit on Operational Efficiency and Financial Performance Based on Hybrid Econometric Models
Previous Article in Special Issue
The Effect of Stock Return Sequences on Trading Volumes
Article Menu

Export Article

Open AccessFeature PaperArticle
Int. J. Financial Stud. 2017, 5(4), 28;

A Study of Perfect Hedges

Department of Accounting and Finance, San José State University, San José, CA 95192-0066, USA
Received: 27 August 2017 / Revised: 22 October 2017 / Accepted: 9 November 2017 / Published: 14 November 2017
(This article belongs to the Special Issue Financial Economics)
Full-Text   |   PDF [1041 KB, uploaded 14 November 2017]   |  


In this study, we attempt to identify the asset which has the best hedging characteristics against inflation. We study stock, bond, commodity, real estate and oil indexes. We also study these indexes tracking exchange traded funds (ETFs) to determine the most beneficial tradable asset in addition to the more theoretical index for inflation hedging. We find that, in our sample, oil is the best hedge against inflation, even though three in total are a good hedge—oil, gold and corn—with corn and oil being complete hedges, while gold is a partial hedge. Two assets have conflicting results depending on whether we examine the index or the ETF: the real estate index is a hedge, whereas real estate ETF is the opposite of a hedge. Similarly, the bond index is not related to inflation, whereas bond ETF is the opposite of a hedge. We find that stocks, soy and beef are not hedges against inflation. View Full-Text
Keywords: perfect hedge; exchange traded funds; ETFs perfect hedge; exchange traded funds; ETFs

Figure 1

This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).

Share & Cite This Article

MDPI and ACS Style

Ivanov, S.I. A Study of Perfect Hedges. Int. J. Financial Stud. 2017, 5, 28.

Show more citation formats Show less citations formats

Note that from the first issue of 2016, MDPI journals use article numbers instead of page numbers. See further details here.

Related Articles

Article Metrics

Article Access Statistics



[Return to top]
Int. J. Financial Stud. EISSN 2227-7072 Published by MDPI AG, Basel, Switzerland RSS E-Mail Table of Contents Alert
Back to Top