Portfolio Optimization in Prices of Fatals for Liability Driven Portfolios

Hedging terms are geared towards hedging larger returns of the liability. So ideally, first of all, you would like the fatales in your assets to neutralize the fatale in the liability. And then secondary to that, any fatales in the assets that you can't neutralize, you want to diversify. The final result is, I guess, unsurprisingly, right, you hedge what you can Hedge, what you can hedge, and you diversify what you cannot hedge.