New study reveals key to reducing energy market price risk!
The article explores how to reduce the risk of price fluctuations in energy commodities like crude oil and natural gas by using futures contracts. Researchers compared different methods like OLS, VAR/VECM, ARCH/GARCH, and copula to find the best way to calculate the optimal hedge ratio. By analyzing spot and future prices over a five-year period, they determined the most effective model for hedging risk.