Learn what Value at Risk (VaR) means in finance, including real-world examples, different types (historical, parametric, Monte Carlo), and the key formulas used to calculate VaR. From basics to breakthroughs, here's everything about Value at Risk in a nutshell. Protect your assets with these insights. VaR is a risk measure that estimates the maximum potential loss in a portfolio or financial instrument over a given time horizon and confidence level. Learn how VaR is calculated, what assumptions and limitations it has, and how it can be used in portfolio management. Value at Risk, VaR is yet another metric discussed so very often in the finance circles. It represents the losses from the portfolio expected to occur over a given period. This happens to be an estimation, but during times when decisions are made, while the market happens to become highly volatile, it still comes in very handy. The core advantage of VaR is its simplicity, which makes it the cornerstone of risk management for understanding investor exposure and comparing various portfolios or ...
