Hull Sec 3.5 Hedging an Equity Portfolio

[Hello_World]

In the above section, it states the following:

"Comparing equation (3.5) with equation (3.3), we see that they imply h hat = beta. This is not surprising. The hedge ratio h hat is the slope of the best-fit line when percentage one day changes in the portfolio are regressed against percentage one-day changes in the futures price of the index. Beta is the slope of the best-fit line when the return from the portfolio is regressed against the return for the index."​

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I think there is a subtle point here.

• h hat is change in portfolio (to be hedged) against change in future price.
• beta is change in portfolio (to be hedged) against change in index value (change in spot index price instead of future price).

So in the above quote, the author implicitly assumes that spot index price and futures index price are the same. Is this right? Or maybe I mis-understood the text. Could anyone help clarify, please? Thank you.