Cluster Analysis
Cluster Analysis helps risk managers in identifying different groups (clusters) in a given portfolio data.
Risk Management Process with Examples
Risk management includes the sequence of activities to reduce or eliminate an entity’s potential risk. Read below &...
Put-Call Parity
Put-call parity allows investors and risk managers to calculate the price of either put or call if the value of anyon...
Short Selling
Short selling is when an investor borrows a security and sells it on the open market, intending to repurchase it for ...
What is Securitization?
Securitization is the procedure where an issuer designs a marketable financial instrument by merging or pooling vario...
Euler’s Theorem
The generalization of Fermat's theorem is known as Euler's theorem.
Systemic Risk
Systemic risk refers to the potential risk of a collapse of the entire financial system due to one factor or a combin...
What is Idiosyncratic Risk?
Idiosyncratic risk refers to the inherent factors that can negatively impact individual securities or a very specific...
Autocorrelation
Autocorrelation is the measure calculated to find out that to which degree a variable is correlated to its past values.
What is Expected Value?
The Expected Value is the weighted average of the possible outcomes of a random variable, where the weights are the p...