Decoded Intelligence Signal
Hedge Ratio (β)
advanced
strategy
Verified: May 27, 2026Lexicon Core Definition
The quantity of one asset required to hedge the risk of a position in another asset; in pairs trading, calculated via ordinary least squares (OLS) regression and used to construct a market-neutral spread; recalculated periodically (typically monthly) as the relationship between assets evolves.
Analysis Breakdown
The quantity of one asset required to hedge the risk of a position in another asset; in pairs trading, calculated via ordinary least squares (OLS) regression and used to construct a market-neutral spread; recalculated periodically (typically monthly) as the relationship between assets evolves. Full explanation coming soon when Journey 22 content is ingested.