HMA

Description A hedging misalignment parameter, which is designed to limit the extent to which indirect hedges can reduce capital requirements given that they will not fully offset movements in a counterparty's credit spread.
Reference [MAR50.25]
Notation $\sum_{c} HMA$
Formula $$\sum_{c} HMA=\sum_{c} \sum_{h \in c} \left(1- r_{hc}^2 \right) \cdot \left( RW_{h} \cdot M_h \cdot B_{h} \cdot DF_h \right)^2$$

See also

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