Pace Global

Development of Multi-Commodity Risk Assessment

Clien Need
Client Need:
An industrial client needed to develop a multi-commodity risk assessment to facilitate objective-setting, risk tolerance development and hedge program design.


Our Role
Our Role:
Pace Global was retained to perform value-at-risk (VaR) estimation and develop a profile of cost distributions for an iron-ore mining firm’s $200 million multi-commodity energy portfolio. Using stochastic inputs derived from forward price curves, Pace Global conveyed an accurate picture of the firm’s exposure to price volatility, enabling the client’s senior management to develop meaningful risk tolerance boundaries and specific hedging strategies.


Results
Results:
The client was able to develop, implement, and execute a robust hedge program.
Pace Global