Foreshock volatility based metal hedging strategy

experience. These events of the previous decades led investors to
diversify their portfolios with precious metals. As a result, the prices
for raw materials, auxiliary materials, and operating materials have
risen very strongly. As a result, companies are required to apply
various hedging strategies to hedge production costs. This paper
presents a hedging strategy based on volatility, which allows hedging
against falling commodity prices. This paper deals with developing a
new volatility-based hedging strategy for metals. The focus is on
hedging against falling prices. The newly developed ForeshockVola-based strategy outperformed the 200-day MA strategy. It must
be noted that this is the first study on the presented model due to the
newly developed methodology. In this respect, it is recommended for
further contributions that the investigation period be divided into
individual years, and thus, the respective under - or outperformance
of the vola-based hedging strategy compared to the 200-day MA be
investigated separately.