Volume risk

Volume risk is a commodity risk which refers to the fact that a player in the commodity market has uncertain quantities of consumption or sourcing, i.e. production of the respective commodity.[1] Examples of other circumstances which can cause large deviations from a volume forecast are weather (e.g. temperature-changes for gas consumption), the plant-availability, the collective customer outrage, but also regulatory interventions.

## Contents

* 1 Example
* 2 See also
* 3 References
* 4 External links

## Example

An electricity retailer cannot accurately predict the demand of all house holds for a given time which is why the producer cannot forecast the precise time that a power plant will provide more electricity that consumed, even if the plant always delivers the same output of energy.

## See also

* Spreading activation

## References

1. ↑ Kandl, Peter; Studer, Gerold (January 2001). "Factoring in volume risk". Risk Magazine: 84f. http://www.risk.net/risk-magazine/technical-paper/1530353/factoring-volume-risk. Retrieved 23 October 2015.

## External links

* Pellegrino, R.; Tauro, D. (March 27, 2018). "Supply Chain Finance: A supply chain-oriented perspective to mitigate commodity risk and pricing volatility (in press)" (in en). Journal of Purchasing and Supply Management. doi:10.1016/j.pursup.2018.03.004. https://www.sciencedirect.com/science/article/pii/S1478409218300748. (URL retrieved on Science Direct)

* v
* t
* e

Financial risk and financial risk management

Categories|

| Credit risk|

* Concentration risk
* Consumer credit risk
* Credit derivative
* Securitization

|

Market risk|

* Commodity risk (e.g. Volume risk, Basis risk, Shape risk, Holding period risk]], Price area risk)
* Equity risk
* FX risk
* Margining risk
* Interest rate risk
* Volatility risk
* Liquidity risk (e.g. Refinancing risk)

Operational risk|

* Operational risk management
* Legal risk
* Political risk
* Reputational risk
* Valuation risk

Other|

* Profit risk
* Settlement risk
* Systemic risk

Modeling|

* Market portfolio
* Modern portfolio theory
* RAROC
* Risk-free rate
* Risk parity
* Sharpe ratio
* Sortino ratio
* Value-at-Risk (VaR) and extensions Profit at risk, Margin at risk, Liquidity at risk

Basic concepts|

* Diversification
* Expected return
* Hazard
* Hedge
* Risk
* Risk pool
* Systematic risk
* Financial law

* Financial economics
* Investment management
* Mathematical finance

0.00

(0 votes)

Original source: https://en.wikipedia.org/wiki/Volume risk. Read more

|

Retrieved from "https://handwiki.org/wiki/index.php?title=Finance:Volume_risk&oldid=2957044"
*[v]: View this template
*[t]: Discuss this template
*[e]: Edit this template