In reality, it is often impossible to achieve this perfect hedging. For example, we sometimes want to hedge a spot transaction, but there is no futures contract with this asset as the target in the market. At this time, you can only choose futures whose target assets are highly related to the assets as hedging tools. This kind of hedging is called cross hedging. We call the ratio of the futures contract position used for hedging to the position of the hedged asset as the hedging ratio. The hedging ratio that can effectively and maximally eliminate the risk of price change of the insured object is called the optimal hedging ratio. Hedging with stock index futures is mostly cross-hedging. Because investors can only buy and sell index funds or buy and sell a basket of stocks in strict accordance with the composition of the index, in order to achieve a complete correspondence with stock index futures.