To Quanto or Not to Quanto

Does one always need a Quanto option to hedge foreign exchange derivative exposure? This is investigated empirically, and as an example a put option on the Nikkei Index for a USD investor was examined. Three external events were considered: 1989/90 Japanese stock market crash, 1995 Kobe earth quake and 2011 Fukushima Tsunami. The conclusion is that it depends on the correlation between underlying index and foreign exchange rate and also on the country in consideration.