Portfolio against downside price risk

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You currently hold 25,000 shares of XYZ stock. The stock is currently trading at $68.00 per share. You are interested in hedging against short-term movements in the market and decide to use E-Mini S&P 500 futures to hedge your exposure. The Index is currently at 4025. Contract size = $50 times the index. The beta of the stock is 1.18. Calculate how many E-mini S&P 500 futures contracts are needed to hedge the portfolio against downside price risk. Indicate if you need to go long or short to hedge your exposure.

Reference no: EM133073777

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