i have considered beta weighted hedging of my portfolio but since the dog stocks i trade dont really have high beta it didnt make sense.
but if i was holding mids or blue chip. (eg fmg and bhp)
i would calculate the beta of my portfolio
here is a link explains it better.
https://www.thebalancemoney.com/how-to-calculate-your-portfolio-beta-4590382
and this is how you would calculate the beta of a stock . using eod data. at the bottom vid
so lets say i have calculated the beta of my portfolio of 1.2 and my portfolio is 50k.
so the total i ll need to hedge is 60000 because ( 1.2 x 50k)
lets use BBOZ as a hedge for my portfolio in this example.
price today is 24.54
and i know the beta is around -2.46 x (means when xjo goes up by 1% beta goes down 2.4%)
and also because its says so
https://www.betashares.com.au/fund/australian-equities-strong-bear-fund/
how many bboz do i need to hedge 60000?
so number of stock = 60000 / 2.4/ 24.54
1018 stocks in bboz to hedge.
all in theory.
