Portfolio Risk Assessment Calculator

Use this to check the risk and possible loss of your investment portfolio based on the asset allocation.

Asset Class Weight & Volatility
Stable	Weight
Type \ Duration Short: duration ≤3 years Medium: duration ≤9 years Long: duration >9 years *Floating-rate deposits are considered "Short"	Short	Medium	Long
Time deposit
Stable fund Stable value fund or money market fund with minimal interest rate risk and credit risk.
Sub-total
Bond	Weight
Type \ Duration Short: duration ≤3 years Medium: duration ≤9 years Long: duration >9 years *Floating-rate bonds are considered "Short"	Short	Medium	Long
Treasury including government-sponsored agency's mortgage-backed securities (MBS)
Municipal
Corporate
High yield a.k.a. non-investment-grade bond, or junk bond
Sub-total
Equity	Weight	Volatility
Preferred stock
Value stock
Growth stock
Real estate & REIT
Sub-total
Riskiest asset	Weight	Volatility
Cryptocurrency
Commodity
Derivatives
Others such as hedge fund, private equity, leveraged ETFs, and other alternative investments
Sub-total
Total portfolio		Volatility

This tool helps answer :

How should I allocate investment, diversify risks, to fit my risk appetite the level of risk you're prepared to accept in pursuit of the target investment yield , so I can live comfortably with unrealized loss due to market volatility?
Are long-duration bonds safer than stocks? check the interest rate and credit risk.
How the risk can be mitigated with the increased number of holdings? click

Risk Assessment
Total assets balance
1-year volatility
1-day volatility
Set confidence level
1-day % gain / loss can be	within ±
1-day $ gain / loss can be	within ±
1-year Value at Risk (VaR) Value at risk is a professional measurement of the risk of portfolio. It estimates how much a set of investments might lose (in 1-year period prescribed here, and with a given probability you set below), under normal market conditions.
probability
$ loss can be (worse than)
% loss can be (worse than)
	% breakdown
Interest rate loss
Bond credit loss
Equity & riskiest assets loss
Diversification benefit Because interest rate, bond credit, and equity market are not perfectly correlated, your overall risk (probable loss) can be reduced if your portfolio is diversified in several less-correlated asset classes.
1-year Sensitivity in Down Market
Interest rate	Portfolio may lose
Bond credit spread	Portfolio may lose
S&P 500 index	Portfolio may lose

The volatility (risk) of an asset class

Number of holdings within an asset class The asset class refers to one of the 8 classes we categorize. (Preferred stock, Value stock, Growth stock, Real estate, Cryptocurrency, Commodity, Derivatives, Others.)

Volatility of a single holding (in average)

Typical volatility range:

Preferred stock	10% ~ 30%
Value stock	20% ~ 50%
Growth stock	50% ~ 100%
Real estate & REIT	20% ~ 50%
Cryptocurrency	50% ~ 100%
Commodity	10% ~ 60%
Derivatives	80% ~ 300%
Others	10% ~ 200%

Correlation between holdings (in average)

Typical correlation coefficient:

Concentrated in one industry	0.7 ~ 1.0
Diversified in several industries	0.5 ~ 0.7
Diversified in many industries	0.4 ~ 0.5

Volatility of this asset class calculated by assuming equal weight of each holding.

Benefit of risk diversification

Number of Holdings and Risk

probability	in 1 day	in 1 month	in 1 year
% loss can be (worse than)

By using this, you can also determine how to reduce the risk within the asset class by increasing the number of holdings that are less correlated.

How Risk is Reduced in Longer Period

This tool helps answer :

Why investing for longer period, likewise investing as early as possible, can reduce the overal risk and achieve higher compound return?
What is the distribution of returns in short term, compared to long term?
How long should I invest so the risk, probability of low or negative return, can be mitigated, to a level I can accept?

Portfolio Risk and Return

1-year volatility

Typical volatility range:

Multi-asset portfolio	use "import"
Investment-grade bond fund	3% ~ 7%
High yield bond fund	7% ~ 15%
S&P 500 ETF	16% ~ 24%
NASDAQ index ETF	20% ~ 28%
Value-stock fund	15% ~ 25%
Growth-stock fund	25% ~ 35%
Riskiest-asset fund	30% ~ 100%

Note: this is recommended for evaluating a portfolio, not for a single stock (like betting on one stock!), which may have more unknown idiosyncratic or delisting risk

You can import the "1-year volatility" calcuated from " Risk Assessment" table above, or manually fill the number.

Annual yield We recommend to fill an long-term, objective expectation based on the assets in the portfolio. For example, 5% for corporate bond fund, 8% for S&P 500 ETF, and 9% for NASDAQ-100 ETF. The higher the yield, the higher the volatility should be considered.

Set confidence level The more conservative you are as an investor, the higher the confidence level to consider.

Lower-than-range probability equal to (1-confidence level) / 2.
This is the probability that the outcome (return) will be worse than the lower bound of the range showed below.

Holding Period and Annualized Return

Max tick to show:

Holding Period and Total Return

Probability of total return below

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