The Financial Portfolio Hedging Strategies Applications and Verifications in International Financial Markets

Abstract

The Financial Portfolio Hedging Strategies Applications and Verifications in International Financial Markets

The objective of hedging consists of taking positions that lower the risk profile of the portfolio. Buying financial derivatives and instruments as a hedge is one kind of hedging, it is long position, and in other words it is a position held in derivatives such that a rise in the market increases the value of the position. Otherwise, in short hedging position, something is sold to cover a risk. The doctoral dissertation presents the applications and verifications of financial portfolio hedging strategies in international financial markets. The methods of minimum variance partial hedging strategy, minimal Value at Risk hedging strategy, Delta-Gamma hedging strategy and Beta hedging strategy are applied on domestic and international financial portfolio in international financial markets (China, US and European financial markets). It was verified that hedging strategies investigated should be successfully applied in international financial markets and decrease or reduce the financial risk of financial institutions.