Historic market (Cash) prices and future contract prices are available for last 4 years. I have found correlation between Jan'11 market price with Jan'11, Feb'11 and March'11 future contract prices separately. I am planning to do the same for all months till Dec'14. So I will have 3 coefficients per month, 36 coefficients per year and 144 coefficients for 4 years. Now I want to integrate the data, that means 1) To find only 3 coefficients for each month using total 12 coefficients of January of 4 years. Should I just take mean? Please let me know. 2) How can I incorporate effect of external factors like weather, volumes traded?
Please let me know if I am using wrong approach.