FULL LENGTH RESEARCH
THE HEDGING EFFECTIVENESS OF THE OPTIMAL HEDGE RATIO FOR CRUDE OIL, GASOLINE AND HEATING OIL
Don Charles and Martin Franklin
Department of Economics at the University of the West Indies, St. Augustine Campus.
Accepted 20 August, 2017
Crude oil and refinery fraction prices are volatile. The literature has suggested hedging as one of the means to address such volatility. Most methods for hedging can be categorized as Ordinary Least Squares (OLS) based, Cointegration based, or Volatility based.
Keywords: Hedging Effectiveness, Optimal Hedge Ratio, Petroleum Prices