Service solutions for commodity trading: finalyz pCom
finalyz pCom is the result of recent scientific research and software development, which represent an essential extension of established models for commodity trading.
Specific properties of the commodity market
The dynamics of commodity trading differ essentially from that of the financial markets. This may be caused by the fact that commodities are available only in a limited manner because of finite hauling capacities or cultivated areas.
Additionally, agricultural commodities are also characterized by periodically variable supply. On the other hand, the prices of commodities are controlled by a relatively slow change of the basic demand, long routes of transport as a consequence of the increasing globalization of markets and the offsetting of short-term fluctuations in local demand through several storage strategies.
These specific features allow a mathematically transparent modeling of commodity markets. In recent years, the well-known Schwartz models with different degrees of complexity have been accepted as current standard models of commodity markets.
The software package finalyz pCom
The software finalyz pCom implemented in the computing center of FINALYZ continuously delivers forecast data about the evolution of futures prices, spot prices or storage costs, which are of essential importance for commodity traders with respect to buying and selling decisions.
Characterization of finalyz pCom
In contrast to finalyz pSci, the basic algorithm of finalyz pCom is founded on a fixed dynamic model, even if it has a variable set of internal degrees of freedom. The optimal estimation of all couplings between these degrees of freedom is realized with the help of specially developed filters. finalyz pCom delivers stable and reliable predictions over a forecast horizon of up to six months.
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