# Basis Risk

*Risk & Portfolio — Finicade finance glossary*

The risk that a hedge and the thing it's hedging don't move perfectly together, leaving a residual loss. Hedge jet fuel with crude oil and the imperfect link between them is your basis risk.

**Also known as:** basis

**Related terms:** [Hedging](https://finicade.com/glossary/hedging), [Correlation](https://finicade.com/glossary/correlation), [Futures Contract](https://finicade.com/glossary/futures-contract)

**Taught in:** Hull Street — Hedging with Futures

Source: https://finicade.com/glossary/basis-risk