Sat, Nov 25, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Investor Analytics launches VisualVaR

Friday, September 13, 2013
Opalesque Industry Update - Investor Analytics LLC, a global leader in risk analysis and risk management solutions, has announced the launch of VisualVaR™ – a new approach in communicating Risk using intuitive visual diagrams that explicitly reveal the amount of diversification in a portfolio. The patent pending approach will become part of IA’s overall suite of risk transparency services and has been made accessible on a complimentary basis for those interested in seeing how risk adds in a simulated portfolio. VisualVaR will enable allocators, fund managers and the financial industryat-large to visually comprehend the diversification dynamics of their portfolios while providing better transparency and more intuitive and effective Risk communication.

Damian Handzy, Chairman and CEO of Investor Analytics said, "We are excited that this new visual approach will assist investors and fund managers in better understanding their portfolio’s Risk. VisualVaR was designed with the specific goal of fostering more simple and intuitive conversations about Risk and Diversification.”

VisualVaR takes advantage of a useful geometric interpretation of the industry standard ‘Value-at-Risk’ (VaR) measure which shows how the risks of two parts of a portfolio interact and add together to the total portfolio risk. Risk does not add linearly: a portfolio’s total risk is not the sum of its parts due to diversification, and VisualVaR is designed to shows how those risks actually do add together.

In the VisualVaR diagram, as seen above, one part of the portfolio is always drawn as a horizontal line, representing the “base” or “starting point” portfolio’s risk. The other part of the portfolio’s risk, representing a new investment or a part of the portfolio to be analyzed is drawn from the rightmost end of that first line (shown in blue in the diagram). The direction of that second (blue) line represents the correlation between the two parts. The total risk is then the line that completes the triangle (shown in red). Comparing the lengths of the red arrow (total risk) and the grey arrow (initial risk) indicates whether the investment in question increases or decreases total portfolio risk. The diversification benefit achieved by the analyzed investment is precisely the difference between the lengths of the grey and red arrows.

Michael Poisson, Managing Director added, “VisualVaR enables allocators to better understand their existing portfolio, while individual managers will be able to demonstrate their overall improvement to an allocator’s portfolio. Additionally, this unique approach encourages more fluid and effective Risk communication within the investment community and among industry participants.”

VisualVaR effectively demonstrates how every part of the portfolio contributes to (or hedges) the total risk; how a hypothetical investment would affect the risk profile of an existing portfolio; and how risks add in practice. This same approach can also be applied to three different types of stress tests including: stressing allocation, volatilities and correlations.

In sum, VisualVaR offers a compact way of communicating how risks add, how different parts of the portfolio interact, how much or little diversification is being achieved and how various stresses impact the risk of the portfolio. VisualVaR shows the amount of diversification and allows investment and financial professionals to communicate their risk more intuitively and effectively. To learn more, please download the VisualVaR White Paper at: http://info.investoranalytics.com/visualvar-whitepaperrequest.

Investor Analytics

Press Release

BM

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Tourbillon Capital, a $3.4bn hedge fund that's been sounding the alarm about 'frothy speculation,' is suffering big losses[more]

    From Businessinsider.com: Tourbillon Capital, a $3.4 billion hedge fund firm led by Jason Karp, is suffering. The firm's flagship Global Master fund is down 3.5% for the first 17 days of November, bringing performance for the year to November 17 to a loss of 10.6%, according to a note to investors s

  2. Fund Profile - The Tiger of Silicon Valley: Glen Kacher's sizzling hedge fund[more]

    From Forbes.com: When you live and work in a town where the median home costs $2.7 million and hobnob with the executives of billionaire factories like Facebook and Tesla, it's easy to see why you might think technology stocks are invincible. So far in 2017, the Nasdaq Composite index has gained 25%

  3. Launches - Asset manager launches Europe's first bitcoin mutual fund, Prime Capital Aviation Debt Fund enables aviation debt investments for institutional investors[more]

    Asset manager launches Europe's first bitcoin mutual fund From Coindesk.com: A French asset manager has announced the launch of Europe's first mutual fund centered around bitcoin. Announced today, Tobam's alternative investment fund perhaps represents the latest bid to attract institutio

  4. Legal - Consumers say hedge fund financed illegal tribal lending, New York's highest court permits shareholder of a Cayman-incorporated company to bypass Cayman law and bring derivative action in New York[more]

    Consumers say hedge fund financed illegal tribal lending From Law360.com: Vermont residents on Tuesday hit a hedge fund with a proposed class action in federal court alleging it helped concoct a sham tribal payday lending scheme meant to skirt laws preventing companies from charging cons

  5. Investing - Tech still hedge funds' sweetheart sector: Goldman Sachs, Hedge funds haven't been this leveraged to buy stocks since the bull market began, Top financials hedge fund details short bet against Morningstar, Fund CRC presents an offer for Carige's consumer credit unit, Hedge funds sell shares in Altice USA after difficult quarter[more]

    Tech still hedge funds' sweetheart sector: Goldman Sachs From Reuters.com: Tech stocks remain the largest net sector exposure for equity hedge funds, which are set to deliver their strongest returns since 2013, Goldman Sachs said on Wednesday in a note on the industry's most and l