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Explain combination and back-test

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Reference no: EM133253267

Use the data below on WTI, Brent, heating oil and RBOB gasoline in any combination and back-test them against jet fuel to determine the best correlation. Will have to try a multiple regression to see if using two variables or more make it more efficient. Basis risk and the weights of each variable will come into play here.

For example:
Determine the correlation between the following:

1. WTI vs Jet fuel
2. Brent vs Jet fuel
3. Heating oil vs Jet fuel
4. RBOB Gasoline vs Jet fuel (briefly)

And then back-test them to find the best correlation.

Reference no: EM133253267

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