Understanding Basis Risk in Derivatives

In the context of derivative markets, understanding the various risks associated with derivatives is crucial for effective risk management. One particular type of risk, known as 'basis risk', arises in the context of hedging strategies. Suppose an investor uses futures contracts to hedge an underlying asset. However, the hedge may not be perfectly aligned with the movements of the underlying asset, leading to a potential mismatch in the hedge effectiveness.

Which of the following best describes the nature of basis risk that the investor might experience in this scenario?