Hedging is a risk management strategy that involves finding opposite assets to reduce losses from risks in a single category and prevent low-probability events. These assets can be stocks, using stocks to hedge against other stocks, or stocks to hedge against other assets. Take Warren Buffett as an example: in 2023, he bought a lot of Japanese stocks while simultaneously shorting the yen to hedge against the risk of yen depreciation. This is a classic example of a cross-asset hedging strategy.