RiskMetrics launches visual risk service

New York-based technology firm RiskMetrics has developed a new visual tool that allows investors to see stock volatility at a glance. The Risk Map of the Market, as the new service is known, plots both the Standard & Poor’s index and the Nasdaq 100 index on colour-coded charts, and is sorted by market capitalisation.

The most volatile stocks appear as red boxes, while the least volatile stocks are represented by blue boxes. Likewise, stocks with the largest market caps are arranged on the left-hand side of the chart, moving gradually to the right-hand side of the chart as market caps get smaller. Users receive a risk synopsis of each stock when scrolling their mouse over each box.

"The Risk Map of the Market can be delivered as both a stand-alone module and as part of our new investment management platform, WealthBench," said Martin Nemeth, head of retail products at RiskMetrics. "Our corporate clients are served best by critical risk information, delivered in the most efficient manner possible."

The Risk Map of the Market is based on RiskMetrics' benchmark measure of volatility, the RiskGrade measure. Assigned to every exchange-traded equity and comparable security across all asset classes, the RiskGrade measures volatility on a scale ranging from zero for cash to 1,000 or higher for the most speculative investments.