The safe portfolio should be efficient at matching risk factor exposures on the asset and liability sides. The proper risk management technique that should be used to ensure protection against systematic risks is not diversification – it is hedging. Just as diversification tells you how to be efficient when taking risks, hedging tells you how to be efficient when you avoid taking risks.
Operating from campuses in Lille, Nice, Paris, London and Singapore, EDHEC is one of the world’s top 15 business schools. Fully international and directly connected to the business world, EDHEC commands a strong reputation for research excellence and the ability to train entrepreneurs and managers capable of breaking new ground. EDHEC functions as a genuine laboratory of ideas and produces innovative solutions valued by businesses. The School’s teaching is inspired by its research work and a focus on “learning by doing”, all with the aim of equipping people with the skills to succeed in business.
EDHEC-Risk Institute is changing; going forward it will become EDHEC-Risk Climate Impact Institute (EDHEC-Risk Climate). This evolutions marks EDHEC Business School’s commitment to sustainability issues and will build on its ground-breaking research programmes that explore the relationships between climate change and finance. Our ambition is to become the leading academic reference point for long-term investors, helping them to manage the asset-pricing implications of climate change as well as adaptation and mitigation efforts. EDHEC-Risk Climate’s mission is to help private and public decision-makers manage climate-related financial risks and make the best use of the financial tools available to transition to low-emission and climate-resilient economies.