Value at Risk - VaR

What Does Value at Risk - VaR Mean?
A technique used to estimate the probability of portfolio losses based on the statistical analysis of historical price trends and volatilities.

Investopedia explains Value at Risk - VaR
VaR is commonly used by banks, security firms and companies that are involved in trading energy and other commodities. VaR is able to measure risk while it happens and is an important consideration when firms make trading or hedging decisions.

Filed Under: Financial Theory, Mutual Funds, Stocks

Related Terms

Barra Risk Factor Analysis
Conditional Probability
Conditional Value at Risk - CVaR
Ex-Post Risk
Hedge
Mark To Market - MTM
Robust
Tracking Error
Unconditional Probability
Volatility
More Related Terms

Related Links

Monte Carlo Simulation With GBM - Learn to predict future events through a series of random trials.
Accelerating Returns With Continuous Compounding - Learn the natural log and exponential functions used to calculate this value.
Special Feature: Mutual Funds - Mutual funds are an inexpensive and easy way to benefit from diversification and professional management. See our mutual fund feature for everything you need to know.
Introduction to Value at Risk (VAR) - Part 1 - Volatility is not the only way to measure risk. Learn about the "new science of risk management".
Introduction to Value at Risk (VAR) - Part 2 - Volatility is not the only way to measure risk. Learn about the "new science of risk management".
Portfolio Protection In Diversification And Discipline - A diversified portfolio will protect you in a tough market. Get some solid tips here!
The Uses And Limits Of Volatility - Check out how the assumptions of theoretical risk models compare to actual market performance.
Is tracking error a significant measure for determining ex-post risk?

Rate this Term: Your Rating: Overall Rating: Vote Now!