Modeling and Forecasting Average Temperature for Weather Derivative Pricing

<table class="table-group" id="tab3"><tr><td><table class="table"><tr><td class="thead-hr" colspan="2"><hr/></td></tr><tr class="thead"><td align="left">Indices</td><td align="center">Daily temperature</td></tr><tr><td class="thead-hr" colspan="2"><hr/></td></tr><tr><td align="left">MBE</td><td align="center">0.4301</td></tr><tr><td align="left">RMSE</td><td align="center">5.1763</td></tr><tr><td align="left">UAPE</td><td align="center">1.8839</td></tr><tr><td align="left">MPE</td><td align="center">0.2808</td></tr><tr class="table-tr"><td colspan="2"><hr class="tbody-hr"/></td></tr></table></td></tr></table>

Performance of the mean-reverting Ornstein-Uhlenbeck process for modeling daily temperature in Zhengzhou.

Advances in Meteorology

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Table 3

Table 3: Modeling and Forecasting Average Temperature for Weather Derivative Pricing 