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Tutorial |
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| Portfolio
Risk
Analysis |
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| What |
Portfolio Risk Analysis is the process of measuring and assessing your
portfolio's exposure to market risk. FinPortfolio offers you three views on
risk, allowing you to compare your portfolio to the market portfolio (S&P
500) in terms of Risk-Adjusted Return, Value-at-Risk (VaR), and Market Risk
Exposure (Alpha, Beta and R-squared).
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| When |
You should analyze portfolio risk on a regular, periodic basis. How often you
analyze portfolio risk is up to you, but to keep abreast of the impact of the
market on portfolio risk, you might want to run Portfolio Risk Analysis on a
weekly or even daily basis.
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| Why |
Portfolio Risk Analysis is important because it gives you a powerful tool for
assessing your portfolio's risk, both relative to the market and to the risk
level you desire to maintain.
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| How |
To use Portfolio Risk Analysis most
effectively, there are really only two recommended steps:
- Be sure that you understand the various measurements
that FinPortfolio uses in its presentation of portfolio risk - That means
taking the time to familiarize yourself with the concepts of Risk-Adjusted
Return, Value at Risk (VaR), and Market Risk Exposure. (See links
below)
- Use FinPortfolio's three risk measurements to compare your portfolio's
risk profile with that of the market portfolio (S&P 500), and to
assess whether or not your portfolio has the risk profile that you
desire.
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| Relevant Links |
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