Optimal Hedge Ratio
Calculate Optimal Hedge Ratio instantly with the exact formula and a worked example. Free online calculator — no signup, works on mobile.
Optimal Hedge Ratio
Correlation
σ spot price
σ futures price
h*
0.666667
More about: Optimal Hedge Ratio
What it calculates
The “Optimal Hedge Ratio” calculator computes h* from 3 parameters: correlation, σ spot price, σ futures price.
Used by investors to estimate returns, project savings, and analyze a portfolio.
Example calculation
With parameters Correlation = 0.8, σ spot price = 0.05, σ futures price = 0.06 the result is 0.6667.
How to use
- Enter the parameter values — every field above is adjustable with a slider.
- The result and related metrics are calculated automatically as you type.
- Use the additional metrics shown (if any) where needed.
- Copy the result or bookmark the page.