Value At Risk

Definition

VAR. A technique which uses the statistical analysis of historical market trends and volatilities to estimate the likelihood that a given portfolio's losses will exceed a certain amount. Value at risk is frequently calculated for either one day or two week periods, and is generally given as an X percentage chance that the portfolio will lose Y dollars.

Use Value At Risk in a sentence

After they calculated the value at risk for the portfolio, they felt more confident that their risk for loss had decreased to an acceptable level.

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The granularity of value at risk calucations remains a key point of contention among risk mangagement professional, bank regulators, and legistlators.

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The Value At Risk that he was facing made it clear to him that the way his current business was running would simply not be sustainable into the future and he was very sorry to think of that.

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