Understanding Risk Metrics
The Risk tab provides quantitative measures of your portfolio's risk profile. These metrics help you understand potential downside and make more informed allocation decisions.
Volatility
Portfolio volatility measures how much your returns fluctuate. Higher volatility means larger potential swings in both directions. The app calculates annualized volatility based on historical price data.
Concentration Risk
Concentration risk measures how dependent your portfolio is on a small number of holdings. If your top 3 positions make up more than 50% of the portfolio, you may be taking on unnecessary single-stock risk.
Drawdown Analysis
Drawdown shows the largest peak-to-trough decline in your portfolio value. Understanding your maximum drawdown helps set realistic expectations for future losses.
Diversification Score
The app calculates a diversification score (0-100) based on average correlation between holdings. The score is displayed as a circular gauge alongside a qualitative label. Additional metrics include Sharpe ratio, portfolio beta (vs. SPY), and Value at Risk (VaR) at the 95% confidence level.
Correlation Matrix
For portfolios with multiple holdings, the Risk tab shows a correlation matrix that helps you understand how your positions move relative to each other. Low or negative correlations indicate better diversification.
How to Access
Navigate to Analytics, select a portfolio, and choose the "Risk" tab.