Market correlation refers to the identity of market supply and demand that affects the prices of two commodities; If the relationship between supply and demand changes, it will affect the prices of two commodities at the same time, and the prices will change in the same direction.
The opposite direction means that the buying and selling directions of two transactions are opposite, so that no matter which direction the price changes, there is always a profit and a loss. Of course, in order to protect the capital, the number of two transactions must be determined according to the range of their respective price changes, so that the number is roughly the same.
Hedging can be used in stock market, but it is widely used in futures trading. This is related to the different rules of trading system in stock market and futures market.
Hedging is mainly used to prevent risks, not a more active investment scheme.
As the saying goes, the greater the risk, the greater the income. There is no way to make money on your own initiative without taking risks.
But the risk must be controlled to a certain extent.
Hedging is a tool for institutions to lock in profits after obtaining certain profits.
For example, a cotton production enterprise sells short at the price of 14000 yuan. Even if the futures price rises to 16000 yuan in the final settlement, the enterprise can make up for the loss of 2000 yuan from the spot price while rising, so that the enterprise can lock the price at 14000 yuan.