cash flows of the hedged item and those of the hedging instrument, but here returning: 1 - (standard deviation of the hedge instrument / standard deviation of the instrument being hedged) Sources Resources Recognition of previous GAAP hedge relationship when it first applies IAS 39, Accountancy; Jun2004, Vol. 133 Issue 1330, p90-91. Accounting for electricity derivatives under IAS 39, Journal of Derivatives & Hedge Funds (2007) 13, 233–246. References Derivatives (finance) Accounting terminology Market risk