What is 'Value At Risk  VaR'
Value at risk (VaR) is a statistical technique used to measure and quantify the level of financial risk within a firm or investment portfolio over a specific time frame. Value at risk is used by risk managers in order to measure and control the level of risk which the firm undertakes. The risk manager's job is to ensure that risks are not taken beyond the level at which the firm can absorb the losses of a probable worst outcome.
BREAKING DOWN 'Value At Risk  VaR'
Value at Risk is measured in three variables: the amount of potential loss, the probability of that amount of loss, and the time frame. For example, a financial firm may determine that it has a 5% one month value at risk of $100 million. This means that there is a 5% chance that the firm could lose more than $100 million in any given month. Therefore, a $100 million loss should be expected to occur once every 20 months.

Marginal VaR
The additional amount of risk that a new investment position ... 
Conditional Value At Risk  CVaR
A risk assessment technique often used to reduce the probability ... 
Risk Control
The method by which firms evaluate potential losses and take ... 
Economic Capital
The amount of capital that a firm, usually in financial services, ... 
Incremental Value At Risk
The amount of uncertainty added to or subtracted from a portfolio ... 
Price Risk
The risk of a decline in the value of a security or a portfolio. ...

Investing
Value at Risk (VaR)
Value at risk, often referred to as VaR, measures the amount of potential loss that could happen in an investment or a portfolio of investments over a given time period. 
Professionals
Risk Management Framework (RMF): An Overview
A company must identify the type of risks it is taking, as well as measure, report on, and set systems in place to manage and limit, those risks. 
Professionals
Backtesting ValueatRisk (VaR): The Basics
Learn how to test your VaR model for accuracy. 
Fundamental Analysis
How Investment Risk Is Quantified
FInancial advisors and wealth management firms use a variety of tools based in Modern portfolio theory to quantify investment risk. 
Entrepreneurship
Why Companies Need Risk Management
Implementing risk management strategies can save an entire organization from failure. Is yours up to snuff? 
Economics
What's Economic Capital?
While regulatory and economic capital use some of the same measurements of risk to determine how much capital a firm should hold in reserve, economic capital uses more realistic measures. 
Retirement
Risk and Diversification: Different Types of Risk
Let's take a look at the two basic types of risk: Systematic Risk  Systematic risk influences a large number of assets. A significant political event, for example, could affect several of the ... 
Fundamental Analysis
Scenario Analysis Provides Glimpse Of Portfolio Potential
This statistical method estimates how far a stock might fall in a worstcase scenario. 
Term
What Is Financial Performance?
Financial performance measures a firmâ€™s ability to generate profits through the use of its assets. 
Term
Explaining Operational Risk
Operational risk is the risk that a firm will fail or lose money due to failed internal processes.

What are some common measures of risk used in risk management?
Learn about common risk measures used in risk management and how to use common risk management techniques to assess the risk ... Read Answer >> 
What's the difference between EaR, Value at Risk (VaR), and EVE?
Learn about earnings at risk, value at risk and economic value added, how these risk measures are used, and the difference ... Read Answer >> 
What is backtesting in Value at Risk (VaR)?
Learn about the value at risk of a portfolio and how backtesting is used to measure the accuracy of value at risk calculations. Read Answer >> 
What does Value at Risk (VaR) say about the "tail" of the loss distribution?
Learn about value at risk and conditional value at risk and how both models interpret the tail ends of an investment portfolio's ... Read Answer >> 
What is a "linear" exposure in Value at Risk (VaR) calculation?
Learn how the valueatrisk (VaR) calculation is used for portfolios with linear risk as opposed to nonlinear risk, and understand ... Read Answer >> 
What does Value at Risk (VaR) have to do with maximization of shareholder wealth?
Learn about the value at risk statistical measure and how examining the VaR for their investments can help investors maximize ... Read Answer >>