Risk Metrics

Risk metrics are tools used by investors and businesses to measure the potential for financial loss or uncertainty in an investment or decision. They help quantify how much the value of an asset or portfolio might fluctuate or decline under different circumstances. Common risk metrics include standard deviation, which shows volatility; Value at Risk (VaR), estimating potential losses over a period; and Beta, indicating sensitivity to market movements. By analyzing these metrics, stakeholders can better assess, compare, and manage risks to make more informed, balanced decisions aligned with their risk tolerance and goals.