Tail Risk Hedging: The Superiority of the Naïve Hedging Strategy

Mitigating extreme tail risk is essential for institutions and corporations to prevent financial losses from severe asset price fluctuations across many asset classes. This study shows that a simple futures hedging strategy, the naïve hedge, is remarkably effective at managing tail risk—so much so t...

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Bibliographic Details
Published in:The journal of futures markets 2025-08, Vol.45 (8), p.977-1005
Main Authors: Cao, Min, Conlon, Thomas
Format: Article
Language:English
Subjects:
Assets
Economic growth
estimation error
Financial institutions
Futures
Hedges
Hedging
naïve hedge
Risk
Risk management
Risk reduction
tail risk hedge
Citations: Items that this one cites
Online Access:Get full text
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