In finance, to avoid irrational or emotional choices, risk management is utilized to outline risk scenarios and calibrate balanced investment portfolios. Risk management is used to keep the level of risk under control, which means choosing the balance between return objectives and risk tolerance that best suits the character, economic situation and objectives of the investor. This process involves various stages and levels, and continuously engages both the investor and the portfolio manager.
Our platform has an extensive library of functions, calculating quantitative indicators of performance and risk, and performing:
- Measurement of the volatility of individual financial instruments and the overall portfolio.
- Calculation of the VAR component, equal to a percentage estimate of the marginal risk contribution of each individual instrument within the portfolio.
- Calculation of Value-at-Risk for multi-asset portfolios (both with parametric approach including the possibility of back testing, and with the historical simulation method) on a holding period chosen by the user.
- Estimation of the probable ranges of the value of an investment as the volatility and expected return change (cones of probability).
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