Perfect hedge

{
  "id": "MLC-T-INS-002545",
  "term": "Perfect hedge",
  "field": "Insurance and risk management",
  "definition": "A financial strategy designed to completely eliminate the risk of loss from an asset or liability by taking an offsetting position. This involves creating a portfolio where the gains or losses of the hedging instrument exactly match the losses or gains of the asset being hedged. In practice, achieving a truly perfect hedge is rare due to market imperfections, transaction costs, and basis risk.",
  "url": "https://mlchart.com/terminology/insurance/perfect-hedge/"
}