Science and Education Publishing International Journal of Econometrics and Financial Management 2 3 2014 06 09 The Dynamic International Optimal Hedge Ratio 82 94 EN Xiaochun Liu Department of Economics, Emory University, Atlanta, United States Brian Jacobsen IJEFM2014231 10.12691/ijefm-2-3-1 2014 05 19 2014 05 28 2014 06 09 Instead of modeling asset price and currency risks separately, this paper derives the international hedge portfolio, hedging asset price and currency risk simultaneously for estimating the dynamic international optimal hedge ratio. The model estimation is specified in a multivariate GARCH setting with vector error correction terms and estimated for the commodity and stock markets of the U.S., the U.K., and Japan.