Value at Risk (VaR) of crypto portfolio
Investing in cryptocurrencies has gathered much attention over the last couple of months, offering investors extraordinary returns.
Looking for extra profits it is always good to know potential risks, giving yourself a chance to balance one’s portfolio according to individual risk acceptance.
Since the beginning of the XXI century, Value at Risk (VaR) is a widely used risk metric, obligatory among institutional funds.
Due to its complex mathematical definition, the need for big data analysis, and computational demands, VaR has been exclusively available only to global corporations like JP Morgan.
With OT Balance it is available to everyone.
It is a powerful tool that helps keep your risk exposure under control.
How does it work?
Based on historical price movements, our algorithms make thousands of simulations to predict future quotes.
We leverage the Hidden Markov Model approach.
This is how the value of your portfolio is projected 10 days ahead.
Predicted equity is plotted as a density chart.
Personalize your risk acceptance
For a given portfolio and time horizon, the most commonly used probability levels are 5, 7.5, and 10 percent.
For example, if you choose a 5% level and the value at risk for your portfolio at this level is equal to $ 1000, that means that assuming no trading in the portfolio, there is a 5.0 percent probability that the value of your equity will fall by more than $ 1000 after ten days from now.
Do you accept such a risk?
If yes, it is ok. If not, you can always rebalance your portfolio to mitigate your risk exposure.
The portfolio is automatically synchronized with your exchange and all calculations are done for you.
With OT Balance it is easier than you think.
More information about us vision you will find in this article:
Please see our system here: https://www.otbalance.io/
More information you can find here- https://linktr.ee/OTBalance
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