Enabling Scalable Risk Calculations and Advanced Analytics with RadarRadar

Sponsored by
ENABLING SCALABLE RISK
CALCULATIONS AND ADVANCED
ANALYTICS WITH RADARRADAR
WHITE PAPER

Emerging Trends Shaping
Commodity Markets
Commodity markets have grown increasingly attractive
to traders in recent years. The high volatility of
commodity prices, combined with political uncertainty
on the one hand, and new ESG-related regulations and
energy transition policies on the other, have brought
both innovative products and new players into the
market. Additionally, advancements in digitalization
and the growing adoption of data-driven trading models
are accelerating this trend.
New market entrants, such as tech-focused trading
firms, hedge funds, banks, and companies involved
in mining and processing, are driving demand for
enhanced liquidity and sophisticated risk management
solutions.
As McKinsey noted in their paper , the commodity
trading value pool has doubled since the pre-pandemic
era, rising from $29 billion in 2017 to an estimated
$104 billion in 2024. Particularly strong growth has
been observed in agriculture and LNG markets, which
experienced 30–40% year-over-year growth between
2022 and 2023.
With the increasing value of many commodity markets,
competition is expected to intensify. Large trading
firms are likely to scale their capabilities in globally
traded commodities, while startups with advanced
technological expertise are anticipated to disrupt
traditional market structures. Banks with commodity
desks and hedge funds which left commodity markets
a few years ago are now starting to come back.
Several trends are influencing commodity markets
and shaping the risk management needs of market
participants:
• Geopolitical Uncertainty and trade
restrictions: Commodity trading is significantly
affected by evolving restrictions, tariffs, and
regulatory measures which are subject to constant
change. Rapid adaptation to new tariffs, regulations,
or trade restrictions is essential. This includes the
capability to simulate potential scenarios, assess
their impact, and determine appropriate response
measures effectively.
• Geopolitical Uncertainty and short-term
markets: The uncertain geopolitical climate is
prompting buyers to seek more flexible long-term
contracts to better manage demand risks. This, in
turn, heightens exposure to global market price
fluctuations as companies turn to spot markets to
realize short term shortages or surpluses. Efforts
to diversify supply chains have also driven a move
away from long-term point-to-point contracts in favor
of short-term agreements. This leads to growing
trading portfolios as the number of short-term deals
is significantly higher compared to the past.
• Cross-Commodity Interdependencies: The
energy transition is creating new opportunities for
RISK MANAGEMENT TRENDS IN
COMMODITY MARKETS

traders by linking traditionally separate markets and
leading to rise of correlations between commodities
critical for this process. For example, the
production of green hydrogen connects industries
such as oil, food and agriculture, chemicals, and
metals. The growth of LNG markets, in particular,
has increased global interconnection and
interdependence by linking gas markets. Transition
of Europe from Russian natural gas to LNG
means strong ramp up for the global LNG market.
Interdependence between commodities are driving
traders to explore new markets and diversify their
portfolios. However, entering these new markets
often necessitates additional software solutions
to address the unique characteristics of specific
commodities. Many commodities involve complex
quality attribute pricing, making it nearly impossible
for a single CTRM system to effectively cover
all traded commodities. As a result, the industry
increasingly adopts an ecosystem of tools, including
multiple CTRMs, ERP systems, Price Databases
and shipment support solutions, to manage the
growing complexity of trading operations efficiently.
• Energy Transition Commodities and
products: The energy transition course building
renewable production worldwide, which in turn
means increased demand for critical raw materials.
As companies continue to invest in renewable
energy and green hydrogen, the green transition
is driving significant demand for raw materials like
lithium, rare earth, basic metals, etc.
• ESG-related regulations and new market
products: Due to penetration of ESG-related
rules and regulations the market for environmental
products is developing fast, bringing new types of
products and making the certificate trading more
global.
• Global Scale and Financial Strength: With
the growing interconnectedness of commodity
markets, trading firms are expanding globally.
Achieving success in cross-commodity trading
requires strong balance sheets to cover margin calls
and establish creditworthiness with counterparties.
Players who can effectively leverage correlations
between commodities and capitalize on market
volatility across a broad spectrum of markets will gain
a competitive edge. A cross-commodity presence
allows firms to diversify their portfolios and optimize
risk/return expectations for their invested capital. This
requires both proprietary insights and robust predictive
analytics capabilities combined with effective risk
control functions.
Modern Risk Management
Requirements
Commodity trading firms managing global, multi-
commodity portfolios face complex risk management
challenges.Toremaincompetitive,firmsneedadvanced
solutions capable of addressing the following needs:
1. Data Management and Analytics: Companies
must handle vast amounts of data from diverse
markets. This data must be cleansed, harmonized,
analyzed, and visualized in user-friendly formats
for traders, controllers, risk managers, back-office
users and more. Efficient and high-performance
data management is critical. The shift toward
shorter-term trading also necessitates intraday
A ComTechAdvisory Whitepaper
© Commodity Technology Advisory LLC, 2025, All Rights Reserved. 3
Enabling Scalable Risk Calculations and Advanced Analytics with RadarRadar

Enabling Scalable Risk Calculations and Advanced Analytics with RadarRadar A ComTechAdvisory Whitepaper
and, in some cases, real-time calculations. Most
companies adopt a data-driven approach and
require the implementation of data lakes with open,
scalable architecture, capable of accommodating
all types of data from any source, from structured
to unstructured data. Data lakes provide core
data consistency across a variety of applications,
powering big data analytics and other forms of
intelligent actions.
2. Comprehensive Risk Coverage: Modern risk
management must account for a wide range of
risk tools, including liquidity risk, supply chain
disruption, operational risk, market price and
counterparty credit risk.
3. Flexibility and Transparency: Riskmanagement
systems must offer flexible grouping, drill-down
capabilities, and aggregation options, along with
customizable dashboards. Transparency is key,
requiring systems to provide detailed insights into
risk KPIs and calculation inputs. Out-of-the-box
reports, such as “Explained” metrics (e.g., PnL
Explained, VaR Explained), are now indispensable.
4. Cloud-Native Scalability: Large portfolios
can only be processed efficiently in cloud-native
environments. Horizontal and vertical scaling
ensures the optimal use of computational resources
to meet the demands of modern trading.
5. Rapid Adaptation to Evolving Markets and
regulations: As markets evolve due to various
regulations,restrictionsaswellasenergytransitions,
risk management systems must quickly adapt to
accommodate new assets, valuation models, and
market rules. Traders and analysts often develop
proprietary models outside standard systems, so
seamless integration of these models is essential.
Equally important is the ability to swiftly incorporate
new market data sources into risk calculations.

Commodity companies usually prioritize implementing
deal management, operations, and back-office
solutions, as well as ERP systems, before focusing
more deeply on risk management. CTRM or ERP
systems typically provide basic analytical and risk
functionalities that are sufficient at the initial stages.
Over time, many companies develop in-house solutions
to address specific analytical needs.
However, as businesses grow and operate in more
markets, managing a patchwork of custom solutions
becomes increasingly challenging. This complexity
often signals the right moment to consider external risk
management solutions.
Companies seeking to enhance their risk management
capabilities have three primary options:
1. Rely on the risk functions provided by their CTRM
systems.
2. Extend their CTRM systems with custom
functionality to address gaps.
3. Integrate external risk management solutions into
their software ecosystem.
Let’s explore each approach in detail.
Rely on the risk functions provided
by their CTRM systems.
Legacy CTRMs typically offer basic risk functionalities,
and their time to market for adaptation to market
changes or evolving business processes is slow.
Vendors often prioritize deal lifecycle and operational
requirements over advanced risk capabilities. Certainly,
most advanced CTRMs offer strong risk management
functionality. However, these are high-end solutions
which are usually very expensive and only affordable
for Tier 1 customers only.
Furthermore, legacy CTRMs are rarely cloud-native,
making it difficult to scale as portfolios grow. The
situation becomes even more complex when a company
uses multiple deal management systems for different
commodities.
Modern CTRMs, built on contemporary architecture,
offer greater flexibility and integration tools, enabling
quick inclusion of new markets and assets, supporting
The landscape of risk management solutions is diverse, ranging from basic risk functions
embedded in deal management or treasury systems to advanced, specialized risk management
platforms. The journey from basic position-keeping to sophisticated risk management
capabilities varies from company to company, shaped by its unique history and development
path. Nevertheless, some common approaches can be identified.
RISK MANAGEMENT SOFTWARE
SOLUTIONS

scalable cloud-based calculations, and customizable
trading screens. Technically, they provide the sound
foundation for implementing advanced risk aggregation
capabilities.
However, modern CTRMs often lack the depth and
breadth of legacy systems, particularly when it comes to
out-of-the-box risk KPIs. Building bespoke functionality
on top of these platforms requires significant
development expertise, which may be inaccessible
for smaller organizations. Maintaining and adapting in-
house solutions to accommodate market and business
changes can also become resource-intensive over time.
Specific case of multiple CTRM
systems.
As highlighted earlier, the adoption of multiple CTRMs
is becoming a prevalent trend in commodity trading.
For CTRM systems specific commodity related features
and functions such as pricing, quality management,
inventory management and logistics play crucial role.
In most cases CTRMs cover full functional scope for
certain groups of commodities and provide only basic
support for other commodities. This drives multi-
commodity traders to consider multiple CTRM systems
for their business. Companies expanding their trading
portfolios to include a wider range of commodities,
each with unique features and requirements, frequently
face the need to add additional trading solutions to
their landscape. In some instances, firms deliberately
choose best-of-breed solutions for specific business
areas to optimize functionality. In other cases, the use
of multiple CTRMs arises from mergers or the natural
evolution of business operations. However, managing
risk becomes increasingly complex in a multi-CTRM
environment. Relying on the native risk features within
each system is neither practical nor effective. To ensure
comprehensive and accurate risk management on the
overall portfolio level, implementing an external risk
aggregation solution becomes essential, reliance on
the native CTRM’s capabilities is practically impossible.
Extend their CTRM systems with
custom functionality to address
gaps.
Despite these challenges, many risk managers still view
building some bespoke functionality on top of CTRM as
an advantageous approach because:
1. Analytics remains fully under control, avoiding
reliance on “black box” solutions.
2. The number of interfaces is minimized, as basic risk
aggregation is handled within the standard CTRM
system.
However, in practice these solutions are relatively
expensive due to continuous maintenance costs, the
need to implement required changes, necessity to
keep corresponding skills in the business, in-house
hosting and more.
Integrate external risk
management solutions into their
software ecosystem.
External risk management solutions address many of
the limitations of CTRMs and in-house systems, offering

several key advantages:
1. Focus on Risk Functionality: Specialized
risk management software prioritizes risk-related
capabilities,makingittheidealchoiceforcompanies
following a best-of-breed ecosystem approach.
These platforms provide flexible dashboards, a
comprehensive range of risk KPIs, advanced drill-
downandaggregationfunctionalities,andenhanced
visualization and reporting tools—designed to meet
the exact needs of risk managers.
2. Transparency and Explainability: Transparency
in calculations and explainability of results are
critical features of external solutions, ensuring
users can trust and understand the outputs.
3. Risk aggregation: In a multi-CTRM setup for deal
management,externalrisksystemsplayacrucialrole
as aggregators. Each CTRM may supply different
types of deal data and price information, reflecting
the specific characteristics of the commodities it
manages. An external risk system bridges these
gaps by collecting, processing, and enriching data
from multiple CTRMs. This centralized approach
enables the calculation of portfolio level risk KPIsas
well as a unified view of overall risk exposure across
the entire trading portfolio.
4. Streamlined Integration: External risk solutions
typically offer standardized interfaces, simplifying
integration with existing systems. Many solutions
include out-of-the-box support for standard
market interfaces, reducing the time and cost of
implementation.
5. Adaptability to Market Changes: External
systems are often more responsive to market
changes, quickly introducing valuation models for
new asset types and adapting to evolving regulatory
requirements.
Despite their advantages, external risk solutions often
raise concerns about additional costs, the need for
new interfaces, and the perception of a “black box”
approach.
However, for companies that prioritize robust, scalable,
and transparent risk management capabilities, the
benefits of external solutions often outweigh these
concerns. By focusing on their core strengths, external
risk systems enable firms to navigate the complexities
of modern markets with confidence and precision.

One common concern is about data management
and system integration. For RadarRadar, ensuring a
robust and trustworthy data foundation is paramount.
Multicommodity risk systems require diverse data
types from a variety of sources, often located in different
systems and formats. RadarRadar’s solution focuses
on its ability to seamlessly integrate these data sources
- whether from Excel, CTRMs, ERP systems, or other
platforms - and manage them effectively.
Data management provided by RaderRadar is a key
differentiatorinthemarket.Incomingdatacanbeloaded
manually or automatically, with the system performing
rigorous validation, harmonization, normalization and
outlier detection to ensure accuracy.
One of the most labor-intensive tasks in data
management is mapping data points to hierarchical
master datasets, including products, markets,
counterparties, and more. RadarRadar leverages
AI to simplify and accelerate this process, providing
intelligent suggestions for master data mapping.
Customizable business logic can also be applied at any
stage of the data pipeline, ensuring flexibility to meet
the unique needs of each user.
RadarRadar’s solution harmonizes data by unifying
fields, filling gaps, and then normalizing the data by
transition to units of measure (UoM) and currencies.
This creates a clean, consistent dataset that’s ready for
business logic applications, aggregation, and advanced
analytics on risk and margin. The solution includes full
data historization for both incoming data and calculated
data.
Data security is a top priority for data management. All
data is safeguarded by the platform’s built-in security
systems as well as advanced cloud-based security
tools. By establishing trust in the underlying data,
RadarRadar ensures the reliability of all subsequent
analytics and reporting processes.
RadarRadar also addresses concerns about the time
and complexity of setting up interfaces. According
to Norbert Verhagen, Managing Director & CTO at
RadarRadar, the company can configure all necessary
interfaces for a project within just a few weeks. The
ability to integrate any data source with any data format
in a timely manner is the key feature of the solution.
Standard connections to major market data providers,
such as Reuters, Bloomberg and SAP as well as key
RadarRadar provides advanced risk- & margin management capabilities tailored for multi assets,
multicommodity traders and processors, offering a wide range of risk-related KPIs. But how does
RadarRadar address customers’ concerns and convince them to adopt an external risk system?
RADARRADAR’S APPROACH TO
ADDRESS THE CHALLENGES OF AN
EXTERNAL RISK SYSTEM

derivative brokers such as Marex, StoneX, JPMorgan
or RJO’brien come pre-configured, significantly
simplifying the onboarding process.
Transparency of calculations is another common
concern among risk managers. RadarRadar’s solution
handles this area by offering comprehensive drill-down
capabilities. Users can analyze any risk KPI down
to the sub-deal level, ensuring complete clarity and
confidence in the results.
Additionally, the platform includes detailed reports that
explain changes in KPIs between calculation cycles.
Features like PnL Explained and VaR Explained
empower risk managers to identify the key drivers of
portfolio risks, facilitating more informed decision-
making.
Finally, RadarRadar’s flexible licensing model
addresses concerns about costs. Pricing is tailored not
only to the number of users but also to the complexity
of the solution required. This approach ensures
affordability for smaller, less complex organizations
while remaining scalable for large, sophisticated
multicommodity traders.
Risk aggregation capabilities
RadarRadar is designed to address the challenges of
risk aggregation for companies operating with a diverse
software ecosystem. In environments where multiple
components, such as ERP systems and various CTRMs,
differ significantly in technology, data models, and
interfacing requirements, aggregation is an essential
requirement and a challenge. With flexible interfacing
and robust data management capabilities, RadarRadar
integrates data from various sources, processes it into
standardized datasets, and calculates enterprise-level
risk indicators. This enables organizations to achieve
a consolidated and consistent view of their overall risk
exposure.
The solution is built on a modern, cloud-native architecture, enabling seamless scalability of
calculations. Even as customers’ portfolios grow significantly, the system maintains optimal
performance. According to RaderRadar, enterprise clients can import easily millions of new
records daily. All historical data—both imported and calculated—remains accessible in the live
system without any degradation in performance.
RADARRADAR’S SCALABLE AND
DATA-DRIVEN RISK MANAGEMENT

Flexible Dashboards and Intuitive
Reporting
Configurable dashboards have become a critical
requirement for any risk management application, and
RadarRadar delivers full flexibility in this area. Users can
easily create custom reports and dashboards, with the
ability to drill down into sub-deal level results intuitively.
The platform supports both graphical and tabular data
presentations, ensuring information is accessible and
actionable. Additionally, integrating RadarRadar with
third party BI platforms such as PowerBI is possible
with relative ease.
Advanced and Adaptive Calculation
Capabilities
From a calculation perspective, the system adapts to
whatever data is available. If customers provide PnL at
the deal level along with required market data—such as
volatilities, correlations, or Monte Carlo scenarios—the
system processes this information to produce final risk
indicators. Conversely, when only raw prices and deal
data are supplied, RadarRadar generates all derived
values, including volatility surfaces, correlations, and
PnL, before calculating the risk KPIs.
RadarRadar does not aim to offer complex valuation
models for exotic deal types but focuses on delivering
robust, reliable, and transparent risk metrics for
portfolios of any size. Customers needing exotic
valuation models can easily integrate their custom
solutions into RadarRadar’s calculations, ensuring
flexibility without compromising core functionality.
The solution offers not only the possibility of a deep
understanding of the risks in a portfolio but also
effective risk controls and limit system performance
under complex market conditions. Notifications in case
of certain events can be configured.
The Data Analytics Hub (DAH)
RadarRadar also offers a Data Analytics Hub, enabling
customers to leverage the vast dataset managed and
stored by the system. This includes physical & financial
purchases & sales, stocks, counterparty-, market-, and
product-related data, as well as calculated financial and
risk results. Customers can utilize this comprehensive
dataset to train AI models, create forecasts, or support
other advanced analytics. The system allows seamless
replication of data into external repositories, while
customers can connect directly to the DAH using its
own preferred BI tools.
Market Trends Driving the Need for
Enhanced Risk Management
As stated in the beginning of the paper, the growing
interdependencies between commodities and the
rising demand for materials critical to energy transition
technologiesarereshapingcommoditytradingmarkets.
Geopolitical uncertainty and steadily changing
regulations are forcing companies to pay more attention
to risk management.
These trends encourage traders & processors to
expand their portfolios and acquire specific solutions

for specific commodities. They need risk aggregation
tools to esses risks on corporate and on sub-portfolio
level.
Additionally, the influx of new market entrants and the
increasing focus on financial stability of counterparties
underscore the need for deeper insights into
counterparty risk and margin management.
These developments are driving demand for
professional risk management tools, positioning
RadarRadar as a key player poised to meet the evolving
needs of the market.

ABOUT RadarRadar
RadarRadar is an industry expert in the commodity
trade, production, and processing business, operating
in the most fundamental industries of the world:
food, energy, metals, and other commodities. Since
2010, we have delivered high-profile projects for the
world’s leading commodity producers, traders, and
processors.
We work with clients to configure bespoke and
extendable data solutions that enable successful
digital transformation across critical functions such as
risk management, margin processing, and regulatory
compliance.
https://radarradar.com/demo

ABOUT
Commodity
Technology
Advisory
LLC
Commodity Technology Advisory (ComTech Advisory) is the leading analyst organization cov-
ering the Energy and Commodity Trading and Risk Management (E/CTRM) and Energy Tran-
sition technology markets. Led by Dr. Gary M. Vasey, along with affiliate analysts Dr. Irina Reit-
gruber and Kevin Mossop, ComTech Advisory provides invaluable insights, backed by primary
research and decades of experience, into the issues and trends affecting both the users and
providers of the applications and services that are crucial for success in markets constantly
roiled by globalization, regulation and innovation.
For more information, please visit:
www.comtechadvisory.com
ComTech Advisory also hosts the CTRMCenter and the ETTCenter your online portal with
news and views about commodity / energy markets and technology as well as a comprehen-
sive online directory of software and services providers
Please visit the CTRMCenter at:
www.ctrmcenter.com
Please visit the ETTCenter at:
www.ettcenter.com
Vyhlidalova 823/19
625 00 Brno
Czechia
ComTechAdvisory.com
Phone: +420 775 718 112
Email: info@comtechadvisory.com

Enabling Scalable Risk Calculations and Advanced Analytics with RadarRadar

More Related Content

Similar to Enabling Scalable Risk Calculations and Advanced Analytics with RadarRadar (20)

More from CTRM Center (20)

Recently uploaded (20)

Enabling Scalable Risk Calculations and Advanced Analytics with RadarRadar