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Value at Risk (VaR) estimates maximum loss over time period at confidence level (e.g., 95% confident loss won't exceed $X in one day).

Guida passo passo

  1. 1Input returns history or parameters
  2. 2Calculate percentile loss
  3. 3Report VaR at chosen confidence level

Esempi risolti

Ingresso
$1M portfolio, 95% confidence
Risultato
95% VaR ≈ $50k/day (5% chance of larger loss)
Risk measure used by banks

Errori comuni da evitare

  • Assuming VaR captures all downside
  • Not updating with new volatility regime

Domande frequenti

Doesn't VaR underestimate tail risk?

Yes, doesn't show loss magnitude beyond confidence level; use CVaR (expected shortfall) too.

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