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Hedging basis risk in power portfolio
International Journal of Research in Finance and Management · 2023 · Vol. 6(2) · pp. 289–292
Ritesh Kumar✉(Risk Engineering (Bulgaria))
Abstract
There has been many studies about hedging power prices but most of them are limited to Power Price at hub. This paper studies the Basis Risks in power portfolio more specifically it explain the Basis Risks present in a Power portfolio, the limitations of hedging these risks and develops a framework to hedge the Basis Risk using Principal Component Analysis framework.
Smart Grid and Power SystemsPower Systems and Renewable EnergyPower Systems and TechnologiesPortfolioBasis (linear algebra)BusinessActuarial scienceMarket neutralFinancial economicsEconomicsMathematics
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