DEFINITION of 'RiskGrades - RG'

A trademarked method for calculating the risk of an asset portfolio. RiskGrades are based on a variance-covariance approach that measures the volatility of assets or asset portfolios as the scaled standard deviations of the returns.

More complex RiskGrades calculations allow for a few additional concepts:

RiskGrades (RG)

BREAKING DOWN 'RiskGrades - RG'

RiskGrades were developed by JPMorgan. You can use RiskGrades to determine the level of risk in your portfolio based on the following numbers:


The RGof a risk-free asset is expected to be 0 The RG of a low-risk asset is expected to be 0 - 100 Normal stocks/indexes should have an RGof 100 - 300 Stocks with an RG of 100 - 800 are considered high risk IPOs have an RG greater than 800
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