There is no ideal portfolio insurance strategy. A hedge is always a compromise. The hedging strategy you will choose depends upon the values of some parameters, such as

• the maximum loss you are ready to make
• the maximum cost of your hedging strategy
• the type of hedging instruments you have access to

In most cases, the first step in setting up a hedging strategy is to determine what kind of risk profile is to be obtained. A risk profile shows the probability densities that correspond to each possible yield (or Profit/Loss level) of the portfolio. This means that you can determine how likely a portfolio yield interval is, e.g. that the likelihood of making a loss (a yield of 0% or less) is 10%