stock 1	stock 2	stock 3	stock 4	stock 5	stock 6
Average weekly return	0,006912	0,002916	0,002000	0,003753	0,002069	0,001774
Weekly variance	0,0025	0,0007	0,0006	0,0011	0,0007	0,0009
Current Prices	533	999	175	50	60	110

Given the data above and the following parameters:

You have a long position of 12,000 shares of stock 1. You have to create a hedge portfolio to minimize future volatility

- 10M of capital is available

- You have to hold 12 ,000 shares of stock 1 (calculate the cost with given price)

-You can supplement these shares with either short or long holdings in any of the 5 stocks mentioned above

- You can use up to 50% of the va lue of the long positions as collateral to finance purchases or satisfy short margin requirements

- All short positions require 15% margin ( lower margin requirements apply for short positions that hedge long investments )

- The total notional amount of your p or tfolio cannot exceed $20 M (t his is the sum of the a bsolute values of each position; theoretically you could expand your portfolio virtually without limit by financing purchases with short sales.)

WHAT WOULD BE AN OPTIMAL HEDGING STRATEGY USING QUALTATIVE AND QUANTITATIVE METHODS?