John Bird, Atlas Risk Advisory LLC, in his white paper, describes how many companies hedge each exposure to a preset hedge coverage ratio according to policy. Nevertheless, in practice they will relax this policy if the hedges of some currencies are especially costly, as is the case with large interest rate differentials. Depending on a firm's exposure profile and market volatilities and correlations, this partial hedging may either increase or decrease the firm's overall risk to hedge cost profile.

He believes that it is more effective to use a portfolio approach to quantify the trade-off between hedge cost and portfolio volatility, and offer a solution to manage the two together. Atlas Risk has found that hedging portfolios can greatly reduce portfolio risk while also reducing hedge costs. They have found the robustness of this approach is improved by using data sets across time.

For further details on white paper see here.