Why is this relationship important?
This relationship is important as if the Cu3M price is greater than the Cu1Y price and the market is moving up, it generally means that there is an increased demand for nearby copper, which generally means higher prices.
Cu3M price chart : (Top Left)
|The chart shows the Cu3m price over the last 500 days along with the 200,100 and 50 simple moving average.|
Cu 1Y price chart : (Middle Left)
|The chart shows the Cu 1Y price over the last 500 days along with the 200,100 and 50 simple moving average.|
|Cu3M:Cu 1Y price ratio: (Bottom Left)||The chart shows the Cu3M:Cu 1Y price ratio over the last 500 days|
Static Equilibrium: Scatterdiagram of the Cu3M price (y axis) and the Cu 1Y price (x axis): (Top Right).
|Equilibrium Line: Best line through scatterdiagram. Equilibrium Price: Cu3M price corresponding to last point on the equilibrium line.|
|Distribution of Spread(Middle Right). x axis shows the Cu3m price movement around the equilibrium line.||SPREAD: Cu3M price minus the price on Static Equilibrium line.|
|Dynamic Equilibrium (Spread through Time): (Bottom Right)||Target Line:Best line through the Spread through time. Target Price: Cu3m price corresponding to last point on the target line. Upper & Lower: Price corresponding to 1standard deviation above and below the Target Price|