“… at the initiation of a hedge, a manager substitues the uncertainty of the basis for the uncertainty of the price of the hedged security.” [Schweser Book 3 pg 79]
I though it should be the other way around? When you hedge a security, you are hedging the uncertainty of the price movements. However it will not be a perfect hedge because of basis risk (if the futures maturity is different from the period that you’d want to hedge the asset against).
Thus you are actually swapping the uncertainty of the price with uncertainty of the basis when u hedge the asset.