Hedge Lab
Stock hedges, tested against their cost.
Compare market and sector hedges. See the protection observed, the returns given up and the risks that remain.
5,046 stocks screened · 14 available ETFs
Coverage and exclusions ↓Potential hedges for further research
A qualifying hedge reduced volatility in at least six of eight test quarters and improved the average result in the stock’s worst weeks. This identifies a possible way to manage an existing exposure. It does not establish that the stock is worth buying or that the hedge will be profitable.
Cost and protection
Higher points show a greater reduction in test-period volatility. Further right means more assumed expense. Select a point to open the stock’s comparison.
The same 30 companies shown in the table. A point’s position does not measure future returns or the chance of a loss.
Stock and hedge comparisons
Costs use stated assumptions. Live borrow availability is not established by this screen.
| Company | Hedge | Volatility reduction | Worst-week improvement | Extra annual expense | Improved quarters | Cost category |
|---|---|---|---|---|---|---|
| XOM Exxon Mobil CorpEnergy | XLEShort ETF | 58.5%relative reduction | 91.0%same six stock weeks | 3.09%of long notional | 100%of eight quarters | Higher cost |
| COP ConocoPhillipsEnergy | XLEShort ETF | 54.5%relative reduction | 81.1%same six stock weeks | 3.69%of long notional | 100%of eight quarters | Higher cost |
| CVX Chevron CorpEnergy | XLEShort ETF | 54.5%relative reduction | 67.1%same six stock weeks | 2.82%of long notional | 100%of eight quarters | Lower cost |
| OVV Ovintiv IncEnergy | XLEShort ETF | 53.6%relative reduction | 80.3%same six stock weeks | 4.65%of long notional | 100%of eight quarters | Higher cost |
| EOG EOG Resources IncEnergy | XLEShort ETF | 52.0%relative reduction | 77.5%same six stock weeks | 3.48%of long notional | 100%of eight quarters | Higher cost |
| PR Permian Resources CorporationEnergy | XLEShort ETF | 51.4%relative reduction | 75.6%same six stock weeks | 4.34%of long notional | 100%of eight quarters | Higher cost |
| DVN Devon Energy CorporationEnergy | XLEShort ETF | 50.0%relative reduction | 76.9%same six stock weeks | 4.25%of long notional | 100%of eight quarters | Higher cost |
| FANG Diamondback Energy IncEnergy | XLEShort ETF | 49.5%relative reduction | 64.5%same six stock weeks | 4.12%of long notional | 100%of eight quarters | Higher cost |
| NBXG Neuberger Berman Next Generation Connectivity Fund IncFinancial Services | QQQShort ETF | 49.1%relative reduction | 60.6%same six stock weeks | 3.09%of long notional | 100%of eight quarters | Higher cost |
| STEW SRH Total Return Fund Inc.Financial Services | XLFShort ETF | 48.8%relative reduction | 81.5%same six stock weeks | 2.34%of long notional | 100%of eight quarters | Lower cost |
| CHRD Chord Energy CorpEnergy | XLEShort ETF | 48.5%relative reduction | 75.9%same six stock weeks | 4.20%of long notional | 100%of eight quarters | Higher cost |
| BAC Bank of America CorpFinancial Services | XLFShort ETF | 47.7%relative reduction | 71.4%same six stock weeks | 4.35%of long notional | 88%of eight quarters | Higher cost |
| MGY Magnolia Oil & Gas CorpEnergy | XLEShort ETF | 47.6%relative reduction | 74.9%same six stock weeks | 4.20%of long notional | 100%of eight quarters | Higher cost |
| AEE Ameren CorpUtilities | XLUShort ETF | 46.1%relative reduction | 83.2%same six stock weeks | 2.71%of long notional | 100%of eight quarters | Lower cost |
| MS Morgan StanleyFinancial Services | XLFShort ETF | 44.8%relative reduction | 72.9%same six stock weeks | 4.61%of long notional | 88%of eight quarters | Higher cost |
| OGE OGE Energy CorporationUtilities | XLUShort ETF | 44.8%relative reduction | 72.5%same six stock weeks | 3.01%of long notional | 100%of eight quarters | Higher cost |
| KEY KeyCorpFinancial Services | XLFShort ETF | 43.8%relative reduction | 78.7%same six stock weeks | 4.69%of long notional | 88%of eight quarters | Higher cost |
| SU Suncor Energy IncEnergy | XLEShort ETF | 43.6%relative reduction | 70.0%same six stock weeks | 3.20%of long notional | 100%of eight quarters | Higher cost |
| OXY Occidental Petroleum CorporationEnergy | XLEShort ETF | 43.5%relative reduction | 64.5%same six stock weeks | 3.56%of long notional | 100%of eight quarters | Higher cost |
| MTDR Matador Resources CompanyEnergy | XLEShort ETF | 43.5%relative reduction | 62.1%same six stock weeks | 4.78%of long notional | 100%of eight quarters | Higher cost |
| NOG Northern Oil & Gas IncEnergy | XLEShort ETF | 42.9%relative reduction | 63.2%same six stock weeks | 4.71%of long notional | 100%of eight quarters | Higher cost |
| FHN First Horizon CorporationFinancial Services | XLFShort ETF | 42.7%relative reduction | 66.6%same six stock weeks | 4.55%of long notional | 100%of eight quarters | Higher cost |
| SM SM Energy CoEnergy | XLEShort ETF | 42.4%relative reduction | 52.1%same six stock weeks | 4.86%of long notional | 100%of eight quarters | Higher cost |
| CRGY Crescent Energy CoEnergy | XLEShort ETF | 42.4%relative reduction | 48.9%same six stock weeks | 4.78%of long notional | 100%of eight quarters | Higher cost |
| SF Stifel Financial CorporationFinancial Services | XLFShort ETF | 42.3%relative reduction | 67.9%same six stock weeks | 4.28%of long notional | 100%of eight quarters | Higher cost |
| CFG Citizens Financial Group, Inc.Financial Services | XLFShort ETF | 41.9%relative reduction | 70.1%same six stock weeks | 4.56%of long notional | 100%of eight quarters | Higher cost |
| PSX Phillips 66Energy | XLEShort ETF | 41.8%relative reduction | 65.8%same six stock weeks | 3.80%of long notional | 100%of eight quarters | Higher cost |
| HBAN Huntington Bancshares IncorporatedFinancial Services | XLFShort ETF | 41.6%relative reduction | 71.1%same six stock weeks | 4.58%of long notional | 100%of eight quarters | Higher cost |
| TFC Truist Financial CorpFinancial Services | XLFShort ETF | 41.4%relative reduction | 73.8%same six stock weeks | 4.32%of long notional | 100%of eight quarters | Higher cost |
| COF Capital One Financial CorporationFinancial Services | XLFShort ETF | 41.2%relative reduction | 71.0%same six stock weeks | 4.69%of long notional | 100%of eight quarters | Higher cost |
Coverage and exclusions
Missing or inconsistent histories do not receive a substitute hedge result. Stocks that fail the screen remain in the coverage record.
1,358 qualifying stocks · 398 lower-cost comparisons · 960 higher-cost comparisons.
- 42
- A corporate-action repair is unresolved.
- 1,424
- No candidate meets the risk-reduction and stability criteria.
- 892
- Three complete years of consecutive weekly closes are required.
- 731
- A weekly move above 60% needs a corporate-action and price check.
- 7
- Too many unchanged weekly closes for a reliable hedge comparison.
- 548
- The stock does not meet the $1 price and $5m weekly turnover screen.
- 43
- Daily and weekly adjusted returns disagree. Price history requires review.
- 1
- Thirteen valid weekly volume observations are required for the liquidity screen.
Data and calculations
Every result is a historical research comparison. Borrow availability, trading costs and future protection require separate checks.
Research rules
- Universe
- Active US-listed equities quoted in USD. A $1 minimum adjusted close and $5 million median weekly turnover over 13 weeks with valid volume in every week. This is a liquidity screen, not an execution guarantee.
- Candidate hedges
- SPY, QQQ and IWM, plus the stock’s sector ETF when available. These are a small, predefined comparison set. Current sector membership is used.
- History
- 157 consecutive Friday observations: 52 weeks to estimate the first hedge and 104 weeks to test it. No missing weeks are interpolated. Moves above 60% and unresolved corporate-action repair errors require review.
- Hedge size
- Covariance of stock and ETF returns divided by the variance of ETF returns, estimated using the preceding 52 weeks. Re-estimated every 13 weeks and held for the next test block. Negative ratios are set to zero; shorts are capped at 150% of long notional.
- Publication criteria
- At least 10% lower test-period volatility, a better average result in the stock’s six worst weeks, and lower volatility in at least six of eight quarters. Current correlation must be at least 0.25; the approximate 95% beta interval must be above zero; the current short ratio must be at least 0.10.
- Cost categories
- “Higher cost” means the extra assumed expense exceeds 3% a year of long notional. This is a transparent research convention, not a measure of expected profit or a Buy/Sell rating.
Return and cost basis
- Stored prices
- Stored weekly closes are adjusted for corporate actions and distributions. Returns are treated as total-return proxies. They are not an independently reconciled distribution ledger. Dividends are not added or subtracted again.
- Price consistency
- Where daily history exists, weekly returns are compared with the same completed exchange sessions. If differences exceed 0.10 percentage point, a complete daily closing-session history is used for the entire instrument, or the instrument is withheld. Individual missing sessions are never filled. This checks consistency between stored histories; it does not independently verify every market price.
- Account model
- The long position starts fully funded. Each week its dollar notional is reset to the original size; the short is reset to the chosen ratio. Profits and losses accumulate in cash. Charts show P&L as a percentage of original long notional, not a compounded return on a short ETF.
- Expenses
- Default assumptions: 3% annual stock borrow, no interest on short proceeds, no long financing, and 10 basis points (0.10%) per dollar traded each way. Entry, weekly resizing and final close-out are charged. Annual costs use 365.25 days. Taxes, margin changes and recall costs are not modelled.
- Risk measures
- Annualised volatility is sample standard deviation of weekly P&L divided by original long notional, multiplied by √52. Drawdown is the decline from the simulated account’s running equity peak. Both approaches use the same six worst unhedged test weeks for the downside comparison.
- Current borrowing
- Broker observations have a source, date and expiry. They are separate from assumed historical costs. Availability can change or a loan can be recalled. A current quote is not evidence of historical borrow availability.
- Scenario assumptions
- Three-month total-return shocks are illustrations, not forecasts. They include distributions, use the current ratio, and charge one entry, one exit and 91 days of financing and borrow. They do not assume weekly resizing within the shock.
Selection and uncertainty
Each hedge ratio is tested on later observations. The dashboard then selects among those completed comparisons, so its ranking is retrospective. It is not an independently validated trading strategy. The universe contains currently active stocks, and excludes securities without sufficient history. Historical returns can be revised by providers.
The beta interval uses ordinary least squares and ±1.96 standard errors. It assumes independent errors with constant variance. Weekly histories cannot capture intraday margin calls, gaps or the ability to trade at a given price.
Remaining exposure
A sector or market ETF may itself own the stock. Its holdings weight is not currently verified here. Hedging can therefore reduce some of the company exposure as well as broader market exposure. Sector, currency, credit, earnings and valuation risks can remain. Similar ETF returns do not establish crowded ownership.
Short losses can exceed the initial position. A lower historical volatility does not establish a safer future trade. Published company valuations remain separate from this hedge assessment.
Betting Against Beta · Frazzini and Pedersen ↗Research background; this application does not reproduce the paper’s strategy.