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РfУinБaРnИcКeА
HEDGING – BASIS FOR
RISK MINIMIZATION
Dejan Janchevski R isk as a category in the fi- is precisely through investments how
nancial world is described hedging can be performed, that is, if
The author is an as a probability for the ex- the manager wishes to insure an in-
employee in Central pected yield of a specific in- vestment, he has to do this through
Cooperative Bank AD vestment not to be realized another investment which will be with
Skopje or to be less than the expected level. It a negative correlation.
is a subject of interest of the leading
70 managers, and with its versatility and The beginnings of modern hedging
chameleon coloration, it imposes as a and creation of hedge funds are re-
great challenge. In an attempt to cope lated to the name of the Harvard stu-
with the undesired and unanticipated dent, Alfred Jones, who at the end of
events, the individuals included in fi- the 40’s of the last century, signing a
nance introduced the hedging, a sys- column for the magazine “Fortune”,
tem which will be a lever for realization came to an idea to create a different
of the desired outcomes. Searching for way of money management, although
a common definition of hedging as an the pioneering steps of hedging date
economic category, all analyses lead back to 1865 when the first term con-
to the realization that it represents a tract was concluded in the stock ex-
form of insurance. However, this in- change in Chicago. Such an approach
surance is not the same as the known was based on taking long and short po-
life or non-life insurance for which we sitions in the capital markets through
pay a policy. Here it is a matter of in- which he managed to minimize the
surance against the occurrence of un- risk of change of prices. Such Jones’s
favorable economic events, which have strategy brought stable income for the
a negative effect on the economic sta- hedge funds, however specific hazard-
bility and prosperity of the company. ous moves made the market unstable,
The companies do not buy policies, and the companies started to experi-
rather they conclude transactions and ence significant losses. Such course of
this does not mean that they will not events put the hedging on the margins
be affected by the unfavorable situa- of investment policies for almost two
tions, rather through these policies decades so that it can once again re-
they create a more favorable ambience turn to the game at the beginning of
which will mitigate their impact bet- the 90’s. Today 3.2 trillion dollars have
ter. In the business world, investments been allocated in hedge funds. Thereby
are the ones that measure the suc- last year 71.5 billion dollars were ob-
cess, and success is realized through served as new funds which accumulate
investments. In such a surrounding, it slightly more than 5,000 institutional
investors. When it comes to the real-
September 2016
