A commonly used method to calculate the optimal hedging ratio is called the minimum variance method, and the optimal hedging ratio calculated in this way is called the minimum variance hedging ratio, which is embodied in minimizing the variance of the entire portfolio income. When the underlying stock index of stock index futures used for hedging is highly correlated with the whole market portfolio, the β coefficient of stock or stock portfolio is a good approximation of the minimum variance hedging ratio of stock index futures. That is, β coefficient can be used as the optimal hedging ratio. When the total spot value and futures contract value are determined, the number of futures contracts to be bought and sold is related to the beta coefficient. The greater the beta coefficient, the more futures contracts are needed. On the contrary, the less.