In the complex world of commodity trading, navigating geopolitical risks is paramount. Geopolitical events such as political instability, trade wars, and regulatory changes can have significant impacts on commodity prices and supply chains. Currently, managing geopolitical risks in commodity trading involves human-driven assessments, data collection, and decision-making. Analysts and risk managers monitor global political events, gather information from various sources, and assess potential impacts on commodity markets. This process includes scenario planning, compliance reviews, and periodic documentation. While effective to a certain extent, human involvement can lead to operational inefficiencies and limited access to real-time insights, especially during critical events such as sanctions or embargoes.
Build a fixed effect regression model with lag explanatory variables to test the impact of the geopolitical risk index on the energy imports/exports portfolio of the client. Trade cost factors involved – Distance, Transportation Costs, and Taxes.
Apply models to interpret mediating effect analysis (replacement fuels (coal vs gas, gas vs power)), running simulations on the cost to deliver based on different clauses of cargoes (FOB vs DES), heterogeneity factor attribution to the delivery/sourcing locations introduced by their national attributes (OPEC vs non-OPEC, embargoes, etc.), social events (COVID-19), etc.
Analyze historical geopolitical events and map potential risk scenarios.
Traders and risk managers can make informed decisions to mitigate potential losses by running simulations and analyzing inventory value changes across different scenarios.
Our solution enables users to monitor large datasets in real-time, identifying trends and making timely decisions based on market conditions.
We integrate with market data feeds to provide up-to-date information on commodity prices and geopolitical developments, facilitating enhanced decision-making.
Traders can simulate the impact of geopolitical events on their portfolios, helping them understand potential outcomes and develop strategies to navigate uncertain market conditions.
Automated processes such as Trade Portfolio Management (TPM) workflows and validations reduce manual effort, ensuring quick execution of trades and compliance with regulations.
Our solution includes functionalities for regulatory reporting, invoicing, and document management, ensuring compliance with regulatory requirements.
The implementation of our solution has resulted in tangible benefits for commodity trading businesses:
Value Creed combines human expertise with advanced technology solutions, to provide traders and risk managers with the necessary tools to navigate uncertain market conditions successfully. Our solution offers tangible benefits, including increased profitability, operational efficiency, and compliance. Through comprehensive risk assessment, system customization, data integration, and ongoing support, we ensure that organizations are equipped to make informed decisions and mitigate risks proactively. By leveraging our expertise, businesses can navigate complex challenges, optimize their trading strategies, and seize opportunities for growth and success.
Explore our suite of solutions designed to empower your trading and risk management functions. Partner with us for a transformative CTRM experience that drives success in today’s ever-evolving markets.
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By calling or texting this number (833) 282-7333, Customers agree to receive text messages. If you no longer wish to receive text messages,
you may opt out at any time by replying “STOP.”