An approach to risk used in banking and investment, but less often by insurers and reinsurers. Involves determining the worst loss expected over a target horizon within a given confidence interval.

Value-at-Risk, a measure of risk, estimates the potential loss of at a specified confidence level using statistical analysis.

Value-at-Risk is an estimate of the potential loss in earnings which might arise from market movements under normal market conditions, if the current positions were to be held unchanged for one business day. It is measured to specified level of confidence, often 95 per cent or 99 per cent.

Refers to the potential adverse change in the value of an ass et or of a portfolio of assets.

The VaR of a portfolio is the worst loss expected to be suffered over a given period of time with a given probability. The time period is known as the holding period, and the probability is known as t [..]

VAR is a risk management technique that tells you how much money you can lose from your trading positions, for a given holding period and confidence interval. It uses statistics and works on probabili [..]