Histograms of Heating and Cooling Degree Days
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Seasonal discomfort is measured by the deviation above or below a comfortable temperature. ExchangeâÂÂtraded futures on weather use the comfort level of 65° F in the U.S. cities listed in a variety of futures contracts. This allows people to trade on expected deviations in the climate and to hedge exposure in the energy used to make our environment comfortable.
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Contributed by: Jim Gerdy (March 2011)
Open content licensed under CC BY-NC-SA
Snapshots
Details
The attribution of historical data to years is done by calendar year. That is, a cold season, such as the winter of 2005, is taken from 1/1/05 and combined with the later cold season at the end of 2005. December 2004, commonly called part of winter 2004-2005, is entirely in 2004 in this analysis.
The contract definitions for exchange-traded weather futures can be found at www.cmegroup.com.
These histograms and the summary statistics allow one to begin a detailed comparison of the nature of risk in pricing degree days.
Permanent Citation
"Histograms of Heating and Cooling Degree Days"
http://demonstrations.wolfram.com/HistogramsOfHeatingAndCoolingDegreeDays/
Wolfram Demonstrations Project
Published: March 7 2011