Implementing Statistical Models to Best Manage Energy Risk and Beat Volatility

Companies that either produce or consume energy in bulk will aim to mitigate and manage their risk. Energy markets were always and continue to be volatile, thus the fluctuations of the price massively impact a business’s profit. Therefore, the only challenge for companies is to manage risk, in an efficient and well-informed way. Simply said, the key factor is to implement a good plan to manage energy risk, to meet your company’s risk appetite and goals.

Energy Risk Management Is Not Like Speculative Trading

When you are seeing energy risk management or hedging, its objectives and goals are different from speculative trading. The instruments are likely to be similar, however, where speculative trading that mainly focuses on profits, hedging is the objective most important to diminish the risk for long-term positions. Hedges are built step by step so that the financial position (hedge position) balances the cost of the physical commodity (cash market price). A hedger’s goal is to stabilize instabilities, in the price of the physical commodity that you are buying or selling.

The hedgers should follow a well-planned strategy, that will let them meet their goals depending on their separate risk appetite. To meet their objectives, they can look for the assistance of a veteran energy risk management consulting service, like, Kase and Company, Inc. A trustworthy risk management company that will provide a fully planned hedging strategy for their sake. The strategy is customized to manage the potential risks involved and additionally meet all objectives; allowing the hedger to easily execute hedges and come out with decisions in an effective and timely way.

Present Day Risk Management Systems Are Savvy

The cutting-edge risk management systems have changed the game. These are savvy systems, that employ mathematically and statistically sound data, to provide the hedgers with a fully comprehensive, very accurate market characteristic, notwithstanding exact data dependent on trades, volume and price movements. These systems depend on statistical models that constitute historical data and market price cycles, creating a profitable price risk management profile.

A Statistical Approach Manages Risk Better

Depending on statistical models to come up with hedging decisions bring an incredible advantage. These can be adjusted to allow meeting your risk management objectives. A model can be fine-tuned to meet your risk management the hedging objectives.


Take advantage by implementing the Kase and Company, Inc. to diminish the risks in the energy market. A team of veterans will work with you to create an energy risk management strategy with the use of technical models, like Kase EZHedge, which shows you where to execute your hedge during intense volatility. Because they’ll use a technical approach to managing risk, that depends on accurate information and eventually, it will lower the risk of hedging. This way, energy hedgers such as yourself require a thoughtfully planed strategy that meets your objectives and risk appetite, and more importantly, our statistical models enable you to make quick decisions.