Risk Management

Refresher

Investment Risk: What It Is and How to Measure It

Market vs specific

Systematic vs Idiosyncratic Risk: What Diversification Can't Fix

Market sensitivity

Beta Stock: How Market Sensitivity Is Measured

Excess return

Alpha Investing: Measuring Risk-Adjusted Manager Skill

Volatility

Standard Deviation Investment Risk: The Volatility Measure Explained

Value at risk

Value at Risk (VaR): Measuring Potential Portfolio Loss

Tail expectation

Conditional Value at Risk: What Happens Beyond VaR

Peak to trough

Maximum Drawdown: Measuring How Bad Losses Get

Risk-adjusted

Sharpe Ratio: Return Per Unit of Risk Explained

Downside-adjusted

Sortino Ratio: Risk-Adjusted Return Using Downside Risk

vs benchmark

Tracking Error: Measuring Active Risk Against a Benchmark

What-if shocks

Stress Testing Portfolio: Measuring Losses Under Severe Shocks

Return per beta

Treynor Ratio: Excess Return Per Unit of Market Risk

Active return/risk

Information Ratio: The Gold Standard for Active Manager Skill

Bet sizing

Kelly Criterion: The Formula for Optimal Position Sizing

Can you exit?

Liquidity Risk: When You Can't Sell Without a Painful Discount

Extreme losses

Tail Risk: Extreme Losses Your Normal Model Misses

Simulated outcomes

Monte Carlo Simulation Finance: Modeling Uncertainty with Random Draws