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Next filing · Form 10-Q · Q2 2026 · 54 daysFactor Research · Part 2 published: risk structure in 13F filings across five allocator stylesAPI Update · AOM portfolio chains — single snapshot call for multi-step analyze flowsAPI Update · POST /api/snapshot — canonical JSON portfolio snapshotPart 3 · The One Manager Skill That PersistsPart 1 · One Position, Four BetsNext filing · Form 10-Q · Q2 2026 · 54 daysFactor Research · Part 2 published: risk structure in 13F filings across five allocator stylesAPI Update · AOM portfolio chains — single snapshot call for multi-step analyze flowsAPI Update · POST /api/snapshot — canonical JSON portfolio snapshotPart 3 · The One Manager Skill That PersistsPart 1 · One Position, Four Bets
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Concept · Stock-level risk (bottom-up)

Hedge ratio

The factor exposure you'd offset to neutralize a position's exposure to that factor.

In depth

The hedge ratio turns a decomposition into a trade: the ETF dollar exposure that neutralizes a position's market/sector/subsector beta, leaving only the residual.

Compute it with the API

POST /api/decompose

# pip install riskmodels-py
client.decompose("NVDA")  # returns ETF hedge ratios

Full API docs ↗

In the methodology

Hedge ratios: making it tradeable →

Referenced by (0)

No working paper references this concept yet.

Related concepts

Factor modelBeta (β)ResidualIdiosyncraticAlpha (α)Variance decompositionReturn attribution
← Alpha (α)Stock-level risk (bottom-up) · 6 / 8Variance decomposition →
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