Example Model with absolute Market Data and Correlation
Learn how to build a model with a rollforward logic that adjusts the market growth with a correlation factor.
Basic Overview
Variable Costs should be automatically calculated for the future, based on a correlation factor with the market, which is modelled as absolute values. Hence, we derive the market growth, have the correlation factor influence the growth, and then use that weighted market growth to "Rollforward" the cost base.
Model overview
Input Data
Market data for all years (Created inplace via EXPANDSINGLE in the example)
Var. Cost Base  Base Data for the first year of the simulation
Calculations
Node  Formula  Explanation / Notes 

Growth  ADDEACH('Market' / SHIFT('Market',"Year",1),1) See: YOYGrowth Pattern 

Weighted Market Growth  'Correlation with Market' * 'Growth'  This Node can also be left out and the formula used directly in the "Var Cost" node. 
Correlation with Market  EXPAND(1,"Year")  Use a default 1 for 1 correlation. This Node can be changed in the simulation 
Var Cost  ROLLFORWARD('Var. Cost Base','Weighted Market Growth')  Use the Rollforward logic to forecast values for the simulation years. 
Full Model Download
This Model uses the following functions:
ROLLFORWARD
ADDEACH
SHIFT
EXPAND & EXPANDSINGLE
The example Model does not need an external Data Source. The complete Model code:
model("Correlation Model") {
horizon "Year", "2017", "2020"
defaultDigits 5
defaultScale "s"
defaultUnit "Scalar"
baseline "Default Scenario"
node("Correlation with Market") {
operation """EXPAND(1,"Year")"""
simulationType "SIM"
expectedLevels "Year"
aggregationType "SUM"
}
node("Growth") {
operation """ADDEACH('Market' / SHIFT('Market',"Year",1),1)"""
unit "Percent"
expectedLevels "Year"
aggregationType "SUM"
}
node("Market") {
operation """EXPANDSINGLE(100,"Year", "2017") +EXPANDSINGLE(105,"Year", "2018")+EXPANDSINGLE(107,"Year", "2019")+EXPANDSINGLE(110,"Year", "2020")"""
expectedLevels "Year"
aggregationType "SUM"
}
node("Var Cost") {
operation "ROLLFORWARD('Var. Cost Base','Weighted Market Growth')"
expectedLevels "Year"
aggregationType "SUM"
}
node("Var. Cost Base") {
operation """EXPANDSINGLE(1000,"Year","2017")"""
expectedLevels "Year"
aggregationType "SUM"
}
node("Weighted Market Growth") {
operation "'Correlation with Market' * 'Growth'"
unit "Percent"
expectedLevels "Year"
aggregationType "SUM"
}
}
FAQs
Frequently asked questions can be found here.
Contact
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