Practitioner’s Guide: Precision Hedges Deliver More Than You Expect

Volatility is the new normal and blunt hedges aren’t enough. Learn how to upgrade your hedging toolkit with a framework that reduces unintended factor bets, improves capital efficiency, and protects alpha.

In this comprehensive guide, you’ll learn:

• Why broad ETF hedges like SPY and QQQ often introduce unintended risks, including concentration risk, factor drift, and unwanted thematic bets 
• How to identify “problem” factors that are silently eroding alpha (Market Sensitivity, Downside Risk, etc.) using return attribution, volatility, and Sharpe analysis 
• A repeatable precision hedging framework using a systematic optimization-driven approach 
• A head-to-head comparison of precision hedges vs. SPY/QQQ hedges across predicted risk, capital efficiency, and thematic exposures 
• Backtested results demonstrating how precision hedges reduced volatility, improved Sharpe ratios, and preserved alpha during stress periods such as the April 2025 Tariff Tantrum