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Hedge with
an edge.

Are you worried about your foreign currency exposure? Do you know how to protect yourself? Do your current tools provide consistent, reliable support?

C8 is here to help, providing a unique, web-based platform that delivers a powerful currency hedging solution. Gain the edge you need in a systematic way.


Whenever an investor acquires a foreign asset or a corporation engages in an international sale, effective management of both the asset or cash flow and foreign exchange exposure becomes crucial.

With C8's extensive decades-long experience in foreign exchange, you can concentrate on your fundamental business activities, whether it's selling or investing. C8's advanced FX models and expertise offer precise guidance for actively and optimally handling your foreign exchange exposures across multiple currencies.

C8 Hedge ratios rebalance monthly, whilst turnover constraints can also be included in the rebalance.

C8 Hedge is a simple and intuitive tool that allows you to:
  • Calculate optimal FX hedge ratios for all your currency exposures, both assets and liabilities
  • Add risk weights for each currency exposure
  • Calculate optimal FX ratios for each currency within a portfolio risk limit
  • Use your existing FX execution implementation, no need for any integration work
  • Keep full control of all FX hedging
Your core strengths and our core strengths working to maximise returns and income for your business.

Our Platform

Please test the C8 Hedge for USD, EUR and GBP, updated until {{chartsUntilDateText}}, with the demo below.

To learn more, please request an Account.


Dynamic Hedge Outperformance

EUR base vs USD Asset Hedge
USD base vs JPY Asset Hedge
GBP base vs USD Asset Hedge
EUR base vs CHF Asset Hedge
EUR base vs GBP Asset Hedge
EUR base vs JPY Asset Hedge
EUR base vs SEK Asset Hedge
EUR base vs NOK Asset Hedge
AUD base vs USD Asset Hedge
NZD base vs USD Asset Hedge
USD base vs CAD Asset Hedge
USD base vs BRL Asset Hedge
USD base vs MXN Asset Hedge
USD base vs CNH Asset Hedge

Why Consider FX Hedging?

  • Risk Mitigation: FX hedging helps mitigate the risks associated with currency fluctuations. By employing hedging strategies, businesses can protect themselves from adverse movements in exchange rates, ensuring more predictable outcomes and financial stability.
  • Stable Budgeting and Planning: Hedging provides a level of certainty in budgeting and financial planning. Businesses with international operations can control the impact of currency volatility on their budgets, making it easier to meet financial goals and projections.
  • Protecting Profit Margins: For companies engaged in international trade, currency fluctuations impact profit margins. FX hedging allows businesses to safeguard their profit margins by locking in exchange rates.
  • Facilitating Strategic Decision-Making: A well-executed FX hedging strategy enables businesses to make strategic decisions without being overly exposed to currency movements. This includes making investments, expanding into new markets or entering into long-term contracts with greater confidence in financial objectives.

Why Consider Active FX Hedging?

  • Potential for Higher Returns: Unleash the power of active management to potentially benefit from currency movements, boosting returns beyond what a passive approach can offer.
  • Adaptability to Market Conditions: Stay ahead of the game by adjusting strategies in response to changing market conditions – seizing opportunities and mitigating risks promptly.
  • Customization: Tailor your strategies to your specific risk tolerances and business needs, ensuring a personalized approach that fits your exact requirement.
  • Dynamic Hedging: Active management means dynamic hedging, actively shielding your portfolio against adverse currency movements.

Why C8 Hedge?

  • Experience: The C8 team has decades of experience in currency markets at both major banks and funds.
  • Deep Macro-Economic Expertise: C8 has a deep understanding of FX markets and modelling currency drivers as well as the intricate risks that multinational companies and funds face.
  • Machine Learning Models: Harness the power of machine learning (ML) as C8 identifies patterns in historical data that are predictors of future currency movements.
  • Statistical Models: In conjunction with ML, C8 delves into the relationships between currencies and macro economic factors, providing a comprehensive analysis of currency drivers.
  • Tailored Solutions: No one-size-fits-all – use C8 Hedge to craft customized FX hedging solutions that align precisely with your unique needs.
Strategic Precision
C8Hedge doesn't just react; it strategizes. Our solution identifies potential exposures and offers proactive strategies to optimise financial outcomes.
Disciplined Execution
No more ad-hoc decisions. C8Hedge enforces a disciplined approach, aligning with your financial objectives while adhering to best practices in risk management.
Automation Redefined
Say goodbye to manual calculations and guesswork. C8Hedge automates the FX risk management process, allowing your team to focus on higher-value tasks.

Use Case 1: UK Exporter sells goods to EU

A UK company has received an export order for €50mio from France. The order will be delivered in 6 months time, the company investigates hedging the GBP to EUR FX exposure.

How much should they hedge?

  • Select Base Currency: GBP
  • Select Currency Exposure: EUR

  • Select Hedge Ratio Benchmark e.g. 50%
  • Select Min and Max Ratio: 0% - 100%

Under the prevailing market conditions of Dec 2022, for GBPEUR, C8 Hedge proposed:
  • Macro model is ‘neutral’
  • Intrinsic model is ‘positive’
  • FX Hedge proposes fully hedging the EUR exposure by buying 100% of the GBPEUR amount

Use Case 1: Historical Hedge Performance


Use Case 2: EU Co. with multi-currency exposure

A EUR-based company has a mandate to hedge the next 6 months of net overseas revenue back into EUR:

  • US: €300mio in USD
  • Japan: €150mio in JPY
  • Brazil: €50mio in BRL

How much should they hedge?

  • Select Base Currency: EUR
  • Currency Exposure: USD, JPY, BRL

  • Select Hedge Ratio Benchmark. 100%
  • Select Min and Max Ratio: 50% - 150%

Between 50% and 150% hedged, C8 Hedge proposes:
  • Buying 60% of EURBRL exposure
  • Buying 50% of EURJPY exposure
  • Buying 80% of EURUSD exposure

Use Case 2: Historical Hedge Performance

The orange line gives the performance of the Variable Hedge (as proposed by C8 Hedge) versus the Static Hedge (where the position is always fully hedged for next 6 months receivables).

In this example, the variable hedge returns would have broadly flat over the past 16 years, whereas the Variable Hedge would have been up 30%.


Use Case 3: Swedish Co. assets and liabilities

A SEK-based company buys raw materials in USD and sells products within Europe:

  • US SEK 100mio payable in USD
  • EU SEK 200mio receivable in EUR
  • UK SEK 50mio receivable in GBP

How much should they hedge?

  • Select Base Currency: SEK
  • Currency Exposure: USD, EUR, GBP

  • Select Hedge Ratio Benchmark. 50%
  • Select Min and Max Ratio: 0% - 100%

Between 0% and 100% hedged, C8 Hedge proposes:

  • Selling 20% of SEKUSD exposure
  • Buying 90% of SEKEUR exposure
  • Buying 80% of SEKGBP exposure

Use Case 3: Historical Hedge Performance

The orange line gives the performance of the Variable Hedge (as proposed by C8 Hedge) versus the Static Hedge (where the position is always hedged for next 6 months receivables).

The variable hedge performance includes both receivables in EUR and GBP and payables in USD.


Use Case 4: Asset Manager International Fund

A EUR-based asset manager runs an international equity fund holding shares in multiple currencies:

  • USD: 60%, JPY: 15%
  • USD: 60%, JPY: 15%
  • MXN: 7%

What should they hedge?

  • Select Base Currency: EUR
  • Currency Exposure: USD, JPY, GBP, CHF, MXN

  • Select Hedge Ratio Benchmark: 75%
  • Select Min and Max Ratio: 50% - 100%

Between 50% and 100% hedged, C8 Hedge proposes:

  • Buying 90% of EURUSD exposure
  • Buying 100% of EURJPY exposure
  • Buying 50% of EURGBP exposure
  • Buying 100% of EURCHF exposure
  • Buying 60% of EURMXN exposure

Use Case 4: Historical Hedge Performance


Major Currencies: Multi-model approach

FX Macro:

Foreign exchange rates are driven by macroeconomic developments. For example, how oil price changes affect oil importers and exporters

The model rebalances monthly using:

  • Relative Inflation and Growth
  • Change in Stock and Bond Prices
  • Change in Commodity Prices
  • Enhanced Purchasing Power Parity *

* exchange rate that would equalise relative goods prices between countries

FX Intrinsic:

Using C8’s proprietary methodology, the FX matrix of currency pairs is broken down into pure currency indices, so each currency pair can be measured with respect to the corresponding intrinsic value. Such intrinsic currency indices are information rich and form the core of the trading strategy.

An exclusive C8 signal, this innovative indicator evaluates the relative strength of a trend concerning all major G10 intrinsic currencies simultaneously. This signal provides a comprehensive analysis of a prevailing trend's strength and effectiveness across the developed currency spectrum.

Rebalances Monthly.

Generate Model Outputs
Combine Signals
Derive hedging recommendations for the ccy pair

Major Currencies: FX Model Performance

C8 FX Macro model performance (running live since 2018)

C8 FX Intrinsic model performance (running live since 2020)

Note, these C8 FX models can also be traded directly on C8 Studio, our Direct Indexing platform.

Emerging Markets: Multi-model approach

SERV* model:

Medium-term value based on Terms of Trade, Commodity prices, US Dollar and US yields

*Structural Exchange Rate Valuation

Snap-back model:

Counter-trades excessive FX weakness compared to fair value over recent months

Long-term FX Drivers - Z-score*:

FX Value (against PPP) and FX Carry

*Variation from the expected mean

Fine-tune models for each emerging currency
Systematically select best model(s)
Derive hedging recommendations for the ccy pair

KnowledgeHub

Thoughts From The Divide: Downpayments on a Dream

Thoughts From The Divide: The Right Time to Strike

MI2 for C8 – JPY: Liftshaft Alert

Thoughts From The Divide: Collateral Damage MI2 PARTNERS

Thoughts From The Divide: The Little Things

MI2: EURGBP Inflection Point

Thoughts From The Divide: Lack of Action

Thoughts From The Divide: Relatively Speaking

Thoughts From The Divide: If Then

Thoughts From The Divide: Julian Brigden’s Latest Interview

Thoughts From The Divide: Finding Reasons

C8 Hedge – Hedge With an Edge

Thoughts From The Divide: Bumps and Jumps

MI2: Whither US Treasuries?

Thoughts From The Divide: The Moon

Thoughts From The Divide: Particularly Fluid

Thoughts From The Divide: Strength in Numbers

FX Hedging Active or Passive

Thoughts From The Divide: Regrets

Thoughts From the Divide: Attribution

Thoughts From the Divide: Avoiding the Inverse

C8 Hedge on The Full FX

Thoughts From the Divide:  Tremendous

MI2 for C8 – The FX Year Ahead – Turning Japanese – Feb 2024

Thoughts From The Divide: Hold On Tight

Thoughts From The Divide: A Question of Confidence

Thoughts From the Divide:  Subject to Change

Thoughts From the Divide:  The First Cut

Thoughts From The Divide: Signs of Life

Thoughts From The Divide: Danger to Itself

Thoughts From The Divide: Identifying Ducks

Thoughts From the Divide: Lessons Learned

Thoughts From The Divide: Adjustments

USD Pivot Lower in 2024 – MI2 for C8


Contact

C8 has its offices in key locations.

London Office
184-186 Regent Street
London
W1B 5TW
New York Office
477 Madison Avenue
New York,
NY10022
Ireland Office
Lee View House
13 South Terrace
Cork
Ireland
Hong Kong Office
Rooms 1101A-4
China Evergrande Centre
38 Gloucester Road
HK
Madrid Office
C/ Matias Turrión 24 Bis 1º
28043 Madrid
Spain
Milan Office
Via Olona 12
20123 Milan
Italy
Shanghai Office
Room 3AN204F
Kerry Parkside
1155 FangDian Road
Pudong District
China

C8 is a fintech company that believes in empowering its clients through technology, giving users the freedom to choose, combine and trade strategies sourced from its platform.

C8 Technologies was established in 2017 in London by Mattias Eriksson and Ebrahim Kasenally, previously partners and senior executives at BlueCrest Capital Management - one of the largest global alternative investment management firms. C8 combines decades of investment research with experience in innovative trading technology.

Follow the link for more information: c8-technologies.com


Team

Jonathan Webb
Product Manager FX

Mattias Eriksson
Founder & CEO

Ebrahim Kasenally
Founder & Chief Research Officer


Want to know more, please get in touch