30 years: Financial markets trader
In this video, Abdulla outlines the importance of monitoring portfolio volatility risk and the way it is calculated for a two asset portfolio, and a three stock portfolio.
In this video, Abdulla outlines the importance of monitoring portfolio volatility risk and the way it is calculated for a two asset portfolio, and a three stock portfolio.
5 mins 39 secs
Volatilities and correlations are not static, they can change, sometimes very suddenly, therefore the risk in a portfolio can change over time, or sometimes very suddenly. It’s a case of constantly monitoring the risks, even perhaps trying to anticipate those changes in advance and making appropriate adjustments.
Key learning objectives:
Learn to calculate the volatility of a two asset portfolio
Outline the formula used for a three stock portfolio
Outline the uses of portfolio volatility in risk management
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