A profit and loss attribution framework for physical and financial energy portfolios
A P&L attribution framework can improve the information available to energy traders
The portfolio profit and loss (P&L) is the main key performance indicator in trading businesses. Observing P&L driving factors and fluctuations can give a synthetic health check for multiple dimensions of a trading portfolio and greatly improve its information content. The analysis of the stand-alone and joint effects of the key factors that drive P&L is often referred to as P&L attribution.
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