Analysis of Yihai Kerry's Hedging Value

Abstract

After conducting a SWOT analysis of Yihai Kerry, this paper analyzes the causes of its 2020 hedging failure in terms of its personnel management, hedging system, and strategic positioning respectively. Several scenarios are reasonably hypothesized based on the analysis before, the pursuit of personal performance influenced the trading mentality of the company's traders, while the company's oscillating decision between profitability and hedging made the hedging system and positioning of Yihai Kerry unclear, and under the influence of multiple factors, it suffered huge losses in the volatile futures market. This paper also proposes corresponding solutions to these problems. The research suggests that Yihai Kerry should sort out its own investment philosophy, establish an effective risk management system with clear strategic positioning and trading objectives, introduce and train professional quantitative researchers and traders, develop trading strategies based on the company's own characteristics, and reasonably use options and futures instruments to help the company better risk management.