  We use path integrals to calculate hedge parameters and efficacy of hedging
in a quantum field theory generalization of the Heath, Jarrow and Morton (HJM)
term structure model which parsimoniously describes the evolution of
imperfectly correlated forward rates. We also calculate, within the model
specification, the effectiveness of hedging over finite periods of time. We use
empirical estimates for the parameters of the model to show that a low
dimensional hedge portfolio is quite effective.
