The Minimum Variance Hedge ratio is defined as: $h = \rho * \frac{\sigma_S}{\sigma_F}$

For correlation $\rho$ and $\sigma_S , \sigma_F$ for S.D. of changes in asset and future prices accordingly.

Can this value h be greater than 1?


Yes. Correlations max out at 1. However if the correlation is near 1 and the volatility of the spot is significantly larger than the volatility of the future the hedge ratio will be greater than 1.

The intuition is if that vol of the future is much smaller than the vol of the spot you might need a lot more futures to minimize the high spot variance.

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