A Study of Perfect Hedges
Stoyu I. Ivanov ()
Additional contact information
Stoyu I. Ivanov: Department of Accounting and Finance, San José State University, San José, CA 95192-0066, USA
International Journal of Financial Studies, 2017, vol. 5, issue 4, 1-12
In this study, we attempt to identify the asset which has the best hedging characteristics against inflation. We study stock, bond, commodity, real estate and oil indexes. We also study these indexes tracking exchange traded funds (ETFs) to determine the most beneficial tradable asset in addition to the more theoretical index for inflation hedging. We find that, in our sample, oil is the best hedge against inflation, even though three in total are a good hedge—oil, gold and corn—with corn and oil being complete hedges, while gold is a partial hedge. Two assets have conflicting results depending on whether we examine the index or the ETF: the real estate index is a hedge, whereas real estate ETF is the opposite of a hedge. Similarly, the bond index is not related to inflation, whereas bond ETF is the opposite of a hedge. We find that stocks, soy and beef are not hedges against inflation.
Keywords: perfect hedge; exchange traded funds; ETFs (search for similar items in EconPapers)
JEL-codes: G1 G2 G3 F2 F3 F41 F42 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:gam:jijfss:v:5:y:2017:i:4:p:28-:d:118768
Access Statistics for this article
International Journal of Financial Studies is currently edited by Prof. Dr. Nicholas Apergis
More articles in International Journal of Financial Studies from MDPI, Open Access Journal
Series data maintained by XML Conversion Team ().