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Market risk

Component VAR for a non-normal world

It has become standard to account for non-normality when estimating portfolio value-at-risk, but there are few methods available to calculate the risk contributions of each component in a non-normal portfolio. Brian Peterson and Kris Boudt present a…

Hedge funds harness volatility in turbulent markets

Trading volatility can help hedge funds to diversify their portfolios and generate alpha in a challenging market. Kris Devasabai and Stephen Quigley report on the strategies employed by volatility traders and its emergence as an asset class

Valid Assumptions Required: backtesting

Given the large number of assumptions made in calculating a value-at-risk, how can we have confidence in the quality of the resulting calculation? Brett Humphreys looks at using backtesting to evaluate quality.

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