Today’s sophisticated and capital intensive commodity markets demand risk management solutions that drive instantaneous transparency into portfolios containing multiple commodities, instruments and currencies. Energy and commodity companies face a challenge in finding an integrated solution that can capture, measure and report in real-time across complex portfolios. Risk managers need the ability to quantify positions and exposures in real-time and act quickly on that information. Allegro’s risk management solution provides credit, market and operations risk functionality in one integrated, stand-alone platform. This comprehensive solution provides robust tools to support what-if scenarios, identify opportunities, maintain curves and forecasts, as well as manage deals from capture to confirmation to invoice and general ledger.
- Credit Risk - Allegro’s credit risk solutions provide functionality to connect to major credit agencies to download the most current counterparty credit data available, thus reducing the time-intensive and error-prone task of getting the credit data into the system. The solutions provides a wide variety of credit analysis tools to evaluate not only the current state of a counterparty’s credit status and liquidity, but to look forward in time as well to determine the potential future counterparty credit exposure risk. Additionally, the robust counterparty credit management tools interact seamlessly with trade execution and contract management to provide a much more accurate and efficient credit management processe and much better credit risk data to integrate with the overall risk evaluation of the enterprise.
- Hedging Risk - Allegro’s hedge accounting and reporting capabilities further enable compliance with support for FASB 133, FASB 157, IAS 39, FAS 159, FAS 161 and many other global regulatory standards. Key areas include Financial Instrument Management, Currency Management, Interest Rate Management, Fair Value Management, Fair Value Option Management and Disclosure Management. Providing robust and advanced analytical tools for analysis and reporting, it provides the control, accuracy, timeliness, and security that senior management requires to certify financial reports with confidence.
- Financial Visibility- Allegro’s streamlined, highly automated processes for managing risk, price, and supply and demand curves allow managers to develop hedging strategies and estimate asset value. Drill-downs enable transparency of risk exposure at any level across physical and financial positions. Risk functionality is seamlessly integrated with physical logistics, enabling users to examine risk down to specific product deliveries. Position reports present managers with real-time reporting of exposure, limit management and profit and loss across the entire portfolio.
- Real-Time Analysis - Allegro’s solutions allow risk managers to understand the impact of incremental positions on a portfolio, and by utilizing scenario analysis gain insight into potential risks and rewards. Allegro’s risk capabilities include real-time simulations, volatility analysis (all Greeks) and pre-trade credit verification. The risk simulation “what-if” tool allows companies to more accurately determine how potential market changes will affect various types of risk exposure. By employing simulation, users can identify potential risk behavior (under various market conditions), anticipate market moves, and act accordingly to achieve superior portfolio performance.
- Advanced Trading Environment - The Allegro platform offers traders and managers the flexibility to customize dashboard views and reports (by trader, portfolio, etc.) with live information. Workflow and alert engines allow for dynamic reports and streamlined processes providing the right information at the right time. The platform delivers out-of-the-box web services with connectivity to external data sources, including pricing sources (LIM and Platts) and commodity exchanges like ICE and NYMEX.
Risk Management Components to Enhance ETRM Solutions
- Credit - Delivers advanced credit monitoring, analysis, scoring and rating, and overall counterparty credit management to accurately measure current and future exposure along with using robust credit risk models to accurately rate counterparty credit scores in a timely manner.
- Position - Allegro Position provides trading and risk management valuation metrics including mark to market, profit and loss, and position limits.
- Simulation - Provides a set of tools to help analyze the impact to exposure and profit and loss resulting from movements in the market.
- Currency - Provides the solution to enable management of multiple currencies including the ability to capture currency exchange rates and currency trading.