Time and frequency varying price linkages, hedge ratio and hedging effectiveness in the futures markets of silver and platinum: a Wavelet Local Multiple Correlation approach

The present work examines dynamic price relationships and hedging strategies between the commodities of silver and platinum. The Wavelet Local Multiple Correlation method has been applied to capture correlations across multiple time-frequency scales using daily futures prices from 2018 to 2025. The empirical results indicate a positive and scale-dependent relationship between silver and platinum. Platinum accounts for the largest share of the systems multiscale dependence. Hedge ratio (HR) and hedging effectiveness (HE) indices assume the lowest values in the short-term, for every single year, suggesting that speculators tend to concentrate on the short horizons. Across investment horizons, HR and HE indices recorded the lowest level during the COVID-19 pandemic