Patent ID: 7707084

Claim:
A computer implemented method to determine hedge effectiveness, comprising: selecting, by a computer processor, a hedge from a plurality of hedges; selecting, by the computer processor, an initial test from a plurality of tolerance value checks, wherein the initial test is a first evaluation to determine whether other test methodologies to evaluate hedge effectiveness are necessary; setting, by the computer processor, a final indicia for the hedge as effective if the initial test indicates no other tests need to be executed; selecting, by the computer processor, a first test method from a plurality of effectiveness test methods if the initial test indicates other tests need to be executed, wherein the effectiveness test methods include prospective test methods and retrospective test methods, wherein the prospective test methods use actual historical data in respective test method formulae and the prospective tests use forecast data in respective test method formulae; calculating, by the computer processor, a first test result of the first test method; storing, by the computer processor, the test result in a first memory location; repeating, by the computer processor, the calculating and the storing for each of the plurality of effectiveness test methods to store a plurality of test results; and determining, by the computer processor, the final indicia of hedge effectiveness by applying a rule set to the stored plurality of test results, wherein the rule set is adjustable by a user and comprises a plurality of rules, each rule generates a final effectiveness indicator based on the plurality of test results collectively.