With weather derivatives you are on the right side of weather

A lot of companies turnover and earnings largely depend on weather conditions. Examples are ice cream industry, breweries, outdoor parks and of course energy suppliers. Moreover fix costs in these industries are often over-proportionally high. The right instrument to hedge quantitative risks in these industries are weather derivatives.

The securitization of weather derivatives has not been a success up to now, particularly when speaking of private investors. This is not quite understandable as there is a weak correlation to standard finance market products. Moreover these weather bonds would offer an attractive risk-yield profile. With strong proliferation of weather derivatives new changes for interested investors will come.

Read the whole article series as published in 'Finanz und Wirtschaft' (in german) [1] [2] [3]

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