Value-at-Risk for Energy & Commodity Portfolios

Energy and commodity portfolios contain nonlinear exposures, shifting correlations, and asset-linked risk that traditional VaR frameworks often oversimplify.

This technical whitepaper explains the mathematical and operational design behind Molecule's VaR engine — purpose-built for the realities of modern energy and commodity portfolios.

Inside the whitepaper:

• How Molecule constructs covariance matrices to reflect evolving market regimes
• How the engine supports both parametric and full Monte Carlo VaR methodologies
• How nonlinear and structured instruments are revalued under simulated shocks
• How physical, as-generated exposures are incorporated into portfolio VaR
• How backtesting and diagnostics are surfaced for model transparency

Gain transparency into how Molecule calculates and validates market risk in complex energy portfolios.