c. The correlation between changes in the price of the underlying and a futures contract is +80%. The same underlying is correlated with another futures contract with a (negative) correlation of -85%. Which of the two contracts would you prefer for the minimum variance hedge? c. You would prefer the contract with correlation of -0.85 because it provides greater offsetting or greater reduction of cash flow variance. The question is why -0.85. Because regarding the hedging purpose. We always choose the assets with highest correlation, it's the best for hedging . Hence,, I thought that the greater correlation should be positive