The Price Parity Index of upstream and downstream commodities

According to the definition of SunSirs, Commodity Price Parity Index is the result of the fixed base index of daily price ratio of upstream and downstream commodities in the cycle.

1. Computation
1) Price Parity Rate (R) = Upstream commodity price / Downstream commodity price
2) Price Parity Index (IR) = (Price Parity Rate (R) of today / Price Parity Rate (R0) of the base date) * 100

2. Application of Price Parity Index
1) Reflect the prices and trends of upstream and downstream commodities;
2) The Price Parity Index of one certain group of upstream and downstream commodities should fluctuate within a certain range;
3) The change of Price Parity Index can help to analyze the relative pressure of a certain cost of downstream commodity and the relative force of a certain demand of upstream commodity.

Note: According to the definition of SunSirs, the industry attribute of the price comparison index is determined by the upstream commodity in the price comparison.