The measure of hedging effectiveness in a minimum variance hedge is the size of profit on the hedge.

Name: The measure of hedging effectiveness in a minimum variance hedge is the size of profit on the hedge.
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The measure of hedging effectiveness in a minimum variance hedge is not the size of profit on the hedge. It is the reduction in variance or risk achieved by the hedge. The goal of the hedge is not necessarily to make a profit, but to minimize potential losses.

The Measure of Hedging Effectiveness in a Minimum Variance Hedge