You own an equally weighted portfolio of 50 different stocks
You own an equally weighted portfolio of 50 different stocks worth about $5,000,000.
The stocks are from several different industries, and the portfolio is reasonably well diversified.
Which do you think would provide you with the best overall hedge: a single position in an index futures or 50 different positions in futures contracts on the individual stocks? What are the most important factors to consider in making this decision?

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