Basis risk can arise in various markets, including commodities, interest rates and foreign exchange. It underscores the complexity of hedging strategies and the need for careful monitoring.

Broadly, basis risk is the risk that the value of a futures contract or an over-the-counter hedge will not perfectly offset an underlying position. Other examples abound: interest futures are often ...

“It turns out you can explain a large part of whether rats were risky or not by this particular signal at this particular time,” study coauthor Karl Deisseroth of Stanford told The New York Times. “We ...

Basis risk refers to the potential mismatch between the value of an asset or liability and the financial instrument used to hedge or manage its risk. This divergence can result in unexpected gains ...