Dynamic Risk Tools

In addition to providing baseline and advanced risk analyses [1], IA believes that the best way to understand the risks in a portfolio is by stressing the portfolio - through historic simulations and hypothetical "what-if" analysis. Using IA's risk tools, a client can simulate possible outcomes by stressing the portfolio and the markets in which it invests.

IA offers the following stress tools:

Historical Scenarios

This tool allows you to replay any historic time period to see how the current portfolio would fare. You’ll see results for every level of your portfolio and for the portfolio as a whole.

Results of Historical Scenarios, showing how the portfolio would fare if the specified time periods repeat themselves.

Market stresses 

This analysis allows you to simulate any “nightmare scenario” you may be concerned about.  By shocking any set of market factors in any way, you are in complete control of creating as many shocks as you like.  The results are shown for every level of your portfolio.

Results of Market Stresses, showing how the portfolio would fare if the specified shocks were to occur.

Portfolio Stresses  

This analysis allows you to change the makeup of the portfolio or to simulate changes to the volatilities and correlations of the investments.  You can reallocate capital across managers, strategies or even individual securities.  You can change volatility levels.  You can stress correlations to their extremes.  You can do any or all of these and see their combined effects on the portfolio’s exposure and risk.

Graphical results of several Portfolio Stresses, showing the changes in overall risk and exposure for each user-defined stress.