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Tag: natural hedges

Two hands stabilize opposing assets, illustrating the concept of natural hedging for risk management

Natural Hedges: Understanding this Risk Management Strategy for Institutional Investors

March 21, 2025 FinanceFacts101 Finance Policy

Definition and Concept of Natural Hedging A natural hedge is a risk management strategy that uses assets or investments with inherent negative correlation to mitigate risk. This strategy is called “natural” as it relies on the built-in relationship between different asset classes, rather than relying on financial instruments such as

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