TY - JOUR T1 - Weather Derivatives JF - The Journal of Alternative Investments SP - 65 LP - 74 DO - 10.3905/jai.2004.439650 VL - 7 IS - 2 AU - David van Lennep AU - Teddy N Oetomo AU - Maxwell Stevenson AU - André de Vries Y1 - 2004/09/30 UR - https://pm-research.com/content/7/2/65.abstract N2 - This article demonstrates that companies from a wide range of industries are able to hedge against the volatility of their revenues more efficiently by resorting to non-standardized weather derivative contracts. In addition, including weather derivatives contracts as an additional asset class produces significant diversification benefits for conventional portfolios. This study proposes that institutional investors write non-standardized contracts for their corporate clients, repackage them, and offer them as an additional asset class. This strategy would help to mitigate the lack of liquidity inherent in non-standardized contracts and, simultaneously, provide significant diversification benefits for the conventional portfolio. ER -