reduce the risk vs hedge the risk

Both phrases are correct, but they are used in different contexts. 'Reduce the risk' is commonly used to refer to taking actions to lower the possibility of a negative outcome, while 'hedge the risk' is often used in finance to describe strategies that offset potential losses. They are not interchangeable as they convey different meanings.

Last updated: March 28, 2024 • 995 views

This phrase is correct and commonly used in English.

"reduce the risk"

This phrase is used when describing actions taken to lower the possibility of a negative outcome or minimize the impact of a risk.

Examples:

We need to reduce the risk of accidents in the workplace.
Diversifying your investments can help reduce the risk of financial loss.

Show examples from the web [+]

Typically, to reduce the risk of aortic dissection.
Treatment of postmenopausal osteoporosis to reduce the risk of vertebral and hip fractures (see section 5.1).
The proposed values are therefore appropriate to reduce the risk of over-estimation.
- to reduce the risk of social dumping.
Since prevention still costs less than restoration, we hope that this will enable us to reduce the risk, Mr Pittella, of appropriations being wasted.
This is to reduce the risk of affecting the function of your adrenal gland.
Wash your hands well to reduce the risk of bacterial infections.
The added amendment aims to reduce the risk for abusing the review procedure.
Social security is vital to reduce the risk of poverty.
The aim is to reduce the risk that different member states issue contradictory decisions.
The Commission could also develop non-binding guidance to reduce the risk of divergent interpretations of the framework directive at national level.
The professed aim in doing so is to reduce the risk of pests.
Firstly, this should encourage efforts to reduce the risk of disease.
Vitamin D helps to reduce the risk of falling associated with postural instability and muscle weakness.
Early diagnosis and immediate treatment are important to reduce the risk of disability.
CRIXIVAN has been shown to help reduce the risk of developing illnesses associated with HIV disease.
Growth conditions should be optimal to reduce the risk of false negative test results.
Increasing fluid intake and urine output may help reduce the risk of stone formation, particularly in those with predisposing risk factors.
Heparin and acetylsalicylic acid are given before and after Rapilysin to reduce the risk of new blood clots forming.
In such cases, the dose of the sulphonylurea may be lowered to reduce the risk of hypoglycaemia (low blood sugar levels).

Alternatives:

minimize the risk
lower the risk
mitigate the risk
lessen the risk
diminish the risk

This phrase is correct and commonly used in the context of finance.

"hedge the risk"

This phrase is often used in finance to describe strategies that offset potential losses or protect against adverse price movements.

Examples:

Investors use options to hedge the risk of a stock price decline.
Companies hedge the risk of currency fluctuations by using forward contracts.

Show examples from the web [+]

Such an approach is sufficient to hedge against the risks of both very low inflation and deflation.
A single hedging instrument can hedge the same designated risk only once.
If the institution hedges the price risk associated with an asset, it shall take into account the cash flow resulting from the potential close-out of the hedge.
The liquidity horizon for a securitisation warehouse shall reflect the time to build, sell and securitise the assets, or to hedge the material risk factors, under stressed market conditions.
This Interpretation applies to an entity that hedges the foreign currency risk arising from its net investments in foreign operations and wishes to qualify for hedge accounting in accordance with IAS 39.
Parent wishes to hedge the foreign exchange risk from its net investment in Subsidiary C. Assume that Subsidiary A has an external borrowing of US$300 million.
Initiative to evaluate the risks Hedge Funds imply to financial stability and concrete steps to regulate Rating Agencies,
IFRIC 16 is an interpretation that provides clarification on how to apply the requirements of International Accounting Standard (IAS) 21 and IAS 39 in cases when an entity hedges the foreign currency risk arising from its net investments in foreign operations.
CDS are financial instruments which can be acquired to hedge the credit risk of a debt instrument or assets correlated to such an instrument, or alternatively to take a position on such a debt instrument.
A hedge of the risk of obsolescence of a physical asset or the risk of expropriation of property by a government is not eligible for hedge accounting; effectiveness cannot be measured because those risks are not measurable reliably.
A hedge of the risk of obsolescence of a physical asset or the risk of expropriation of property by a government is not eligible for hedge accounting; effectiveness cannot be measured because those risks are not measurable reliably.
or where the hedge covers interest risk in a held-to-maturity investment).
Such a strategy aims to hedge the beta (market risk) of the positions and generate a return linked to the relative performance of both stocks.
Any resultant exchange differences shall be recognised as income or expense immediately, except that an entity shall continue to apply its existing accounting policy for exchange gains and losses related to hedges of the currency risk of a forecast transaction;
The approach shall be applied only to a fair value hedge of the interest rate risk associated with a portfolio of financial assets or financial liabilities.
A hedge of the foreign currency risk of a firm commitment may be accounted for as a fair value hedge or as a cash flow hedge.
However, under paragraph 87 a hedge of the foreign currency risk of a firm commitment could alternatively be accounted for as a cash flow hedge.
The use or potential use by a CIU of derivative instruments to hedge risks of permitted investments shall not prevent that CIU from being eligible.
Of course, you paid for the privilege of being able to hedge risk in such a way.
The report mentions several issues that require quick policy answers, for instance executive compensation schemes in the financial sector, and the risks of hedge funds.

Alternatives:

mitigate the risk
offset the risk
protect against risk
manage the risk
insure against the risk

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reduce the risk vs hedge the risk

"reduce the risk"

"hedge the risk"

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