Value-at-Risk (VAR)

A category of risk metrics that describe, in terms of probability, the market risk of a trading portfolio over a given period of time. Rather than an expected value of loss, VaR is a conditional estimate of loss. Widely used by banks, securities firms and commodities merchants, VAR can also be used to evaluate and manage risk in the supply chain. VAR is the sum of the probability of disruptive events multiplied by the financial impact of the events for a specific process, supplier, product or customer. The calculation of VaR for different types of disruptions helps companies prioritize proactive risk mitagation efforts and reactive recovery efforts during crisis response.

Back to Riskipedia Index

Connect with Resilinc

Sales & Support (408) 883-8053

Login

Lost your password?