Can you explain the term hedge efficiency?

The hedge ratio compares the value of a position protected through the use of a hedge with the size of the entire position itself. A hedge ratio may also be a comparison of the value of futures contracts purchased or sold to the value of the cash commodity being hedged.

Is a position taken in a particular market in an attempt to compensate for exposure to price fluctuations in another market in order to minimize exposure to undesirable risks. There are many financial determinants to achieve this goal, including insurance policies, futures, barter, options

 

It's an investment position intended to offest potential lossdes or gains that may be incurred by a companion investment _It is used to reduce any substantial lossses ir gsin suffered by an individual or organization