Price risk management in commodity markets in the context of quantitative management theories

Abstract

Abstract: The article examines the issue of price risk management in commodity markets within the framework of quantitative management theories. High volatility of prices for raw materials, energy resources, and industrial goods creates significant threats to the financial stability of enterprises and entire sectors of the economy. The problem is particularly relevant for the agricultural, energy, and metallurgical sectors, where price fluctuations directly affect profitability and competitiveness. The purpose of the study is to develop a scientifically grounded systemic concept of effective price risk management in the context of quantitative management theories. The concept integrates mathematical modeling, statistical analysis, financial engineering instruments, and behavioral analytics to enhance the accuracy, adaptability, and resilience of decision-making in conditions of structural turbulence. The methodological basis of the research combines a systems approach, quantitative modeling, correlation-regression and scenario analysis, as well as a comparative evaluation of hedging effectiveness across industrial sectors. A SWOT analysis was conducted to identify the strengths and weaknesses of the quantitative approach, along with external opportunities and threats to its practical implementation. As a result, an integrated adaptive model of price risk management was developed, combining an optimization core (linear programming, GARCH modeling) with a behavioral self-correction module. The model ensures dynamic adjustment of system parameters in response to market regime shifts and improves decision-making efficiency under volatility. Special attention is paid to cross-hedging and the assessment of basis risk across different commodity markets. The scientific novelty lies in the integration of quantitative and behavioral approaches within a unified adaptive risk management framework capable of real-time learning and self-adjustment. The practical significance of the results is the potential application of the proposed concept for building corporate risk management systems aimed at strengthening the financial resilience of enterprises amid global economic instability. Keywords: quantitative management theories, price risks, commodity markets, hedging, basis risk, cross-hedging.