SAN FRANCISCO, CA – October 3, 2001 – e-Acumen, Inc. has launched the core module of WeatherBook, a quantitative weather risk management platform that prices weather derivatives and simulated portfolios of positions using a highly advanced, proprietary simulation algorithm. Unlike other products on the market, WeatherBook effectively captures the multiple scales of variability in climate data, as well as the complex inter-relationships between multiple contracts in its simulation engine, providing a major step forward in simulating the risk-adjusted returns on weather derivatives and most profitably managing portfolios of weather-related risk.
"Weather derivatives offer tremendous hedging and operational value to energy and agricultural companies, as well as any company exposed to weather-related earnings fluctuations" states Dr. Geoffrey Considine, VP of Weather and Risk Analytics at e-Acumen. "Until now, it has been difficult to accurately quantify their benefits and associated risks. WeatherBook combines accuracy and ease of use in a single package that represents a significant advancement in the trading of weather derivatives."
WeatherBook can be used to price and manage many types of weather risk, such as contracts on degree-days, streamflow, precipitation, temperature, or other less common indices. In addition, WeatherBook’s cross-commodity capabilities allow companies exposed to weather risk that also trade commodities such as natural gas or power, to better understand the complex relationships between weather derivatives and other commodities, interest rates, cash positions, etc. WeatherBook ships with cleaned historical temperature data sets for 200 U.S. cities, corrected for instrument bias, to provide traders and risk managers with the most objective and powerful quantifications of climate and market conditions.
WeatherBook generates market-based simulations of earnings and recommended hedging strategies in a very intuitive and information-rich interface, displaying single- and multiple-deal scenarios, entire portfolios, and nested portfolios, with associated mark-to-model values and returns on Value at Risk. WeatherBook offers statistical detrending tools allowing users to view the full range of pricing scenarios, and provides flexible P&L reporting capabilities for easy integration with financial software packages. WeatherBook’s interface was developed in Interactive Data Language (IDLä), a high-level programming language that is widely used in atmospheric science, and has superior data analysis, graphical modeling, and cross-platform application development capabilities.
WeatherBook is installed on-site and can be deployed rapidly, integrating with existing portfolio management systems. e-Acumen also provides consulting services to accompany the WeatherBook system for optimal financial decision-making under weather-related uncertainty.
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