Tag
#portfolio-risk
5 articles
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Concentration Risk in Portfolios: Measuring It by Position, Sector and Factor
Concentration risk is the exposure that comes from too much of a portfolio depending on one thing. It is measured at position, sector and factor level, and the three disagree.
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Correlation Matrix in Portfolios: How to Read One, and Why Correlations Rise in a Crisis
A correlation matrix shows how closely each pair of holdings moves together. Reading one well means watching the pairs, the period, and how correlations behave under stress.
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Drawdown Recovery Analysis: Underwater Curves and the Arithmetic of Losses
Drawdown recovery analysis measures how long a portfolio stays below its previous peak, not just how far it fell, because time underwater is what investors actually endure.
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Monte Carlo Simulation in Investing: What It Adds and Where It Breaks
Monte Carlo simulation runs thousands of randomised paths to turn uncertain inputs into a distribution of outcomes, and inherits every flaw in the assumptions behind it.
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Stress Testing a Portfolio: Historical and Hypothetical Shocks
Stress testing asks what a portfolio would do under a severe but conceivable shock, using either a replayed historical episode or a designed hypothetical one.
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