Advanced Arbitrage Techniques in Commodity Markets
At HORIZON OEIC LTD, our Commodity Spreads strategy leverages sophisticated arbitrage techniques across diverse commodity markets to generate consistent returns with controlled risk exposure.
Our Approach
We implement a multi-faceted methodology that combines:
Statistical Arbitrage
By analyzing historical price relationships and identifying temporary deviations from established patterns, we capture value when markets return to equilibrium.
Fundamental Spread Trading
Our team monitors supply-demand dynamics, seasonal patterns, and production economics to identify opportunities where fundamental value diverges from market pricing.
Cross-Commodity Opportunities
We exploit inefficiencies between related commodities whose prices should maintain certain relationships based on their underlying economic drivers.
Diversification as Risk Management
Our strategy employs diversification across multiple dimensions:
- Commodity Types: Energy, metals, agricultural products, and more
- Spread Types: Calendar spreads, quality spreads, location spreads, processing spreads
- Time Horizons: From short-term technical imbalances to longer-term fundamental shifts
- Market Conditions: Strategies designed to perform in various volatility regimes
Performance Characteristics
The Commodity Spreads strategy aims to:
- Generate consistent returns with low correlation to traditional asset classes
- Provide natural inflation protection through commodity exposure
- Maintain controlled drawdowns through spread positioning rather than outright direction bets
- Capitalize on market inefficiencies inaccessible to most investors
Our Competitive Edge
HORIZON OEIC LTD brings together quantitative analysis and fundamental market expertise to identify opportunities others miss. Our proprietary models continuously monitor thousands of potential spread relationships, allowing us to:
- Identify mispriced relationships before they become widely recognized
- Execute with precision to capture narrow windows of opportunity
- Adjust position sizing based on conviction and market conditions
- Maintain strict risk parameters at the portfolio level
For sophisticated investors seeking diversification and returns uncorrelated with traditional markets, our Commodity Spreads strategy offers a compelling addition to a well-rounded investment portfolio.