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 risk info Volatility
Preferred stock
Value stock
Growth stock
Real estate & REIT
Sub-total
Riskiest asset Weight risk info 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 :

  1. 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?

  2. Are long-duration bonds safer than stocks? check the interest rate and credit risk.

  3. How the risk can be mitigated with the increased number of holdings? click risk info

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) info 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
risk info

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)
tip
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 :

  1. Why investing for longer period, likewise investing as early as possible, can reduce the overal risk and achieve higher compound return?

  2. What is the distribution of returns in short term, compared to long term?

  3. 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
info 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

Index

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Bond price & risk calculator Stock value & risk calculator Margin loan calculator