Can someonne tell me the difference for both assets and currency with respect to proxy and cross hedge?
Proxy hedge - Mgr enter a forward contract between domestic currency and a second foreign currency that is correlated with the first foreign currency. Cross hedge - Mgr enter a forward contract tp deliver original foreign currency for a third currency. http://www.analystforum.com/phorums/read.php?13,1133430,1134460
The above is the case with Currency. For simplicity, of currency hedge, remember: Cross hedge - Foreign currency stays and Domestic currency is replaced. Proxy hedge - Domestic currency stays and Foreign currency is replaced. For asset: The one that is ‘Cross hedge’ for currency becomes ‘Proxy hedge’ for assets. There is no concept of ‘Cross hedge’ for assets.