What is the 'StashAway Risk Index'?

16 August 2018
Freddy Lim
Co-founder

Share this

  • linkedin
  • facebook
  • twitter
  • email

Want more?

We thought you might.

Join the hundreds of thousands of people who are taking control of their personal finances and investments with tips and market insights delivered straight to their inboxes.

We use the StashAway Risk Index (SRI) to quantify risk for our following portfolios:

This is the measurement we use to determine how much risk our system should expose you to, which then determines your portfolio’s asset allocation. We gave it our own name not to be fancy, but because it’s a specific application of a fairly common risk metric, Value-at-Risk.

To calculate the potential loss of a portfolio in a year, we use Value-at-Risk (VaR). At StashAway, we use 99%-VaR, which can be interpreted as a portfolio having a 99% probability of not losing more than a given percentage of assets in a year.

Here’s an example: a StashAway portfolio with $100,000 USD and a StashAway Risk Index of 10% has a 99% probability of not losing more than 10%, or $10,000 USD in a year. In other words, there is a 99% probability that your portfolio’s value won’t decrease below $90,000 USD if you select a 10% StashAway Risk Index.


Share this

  • linkedin
  • facebook
  • twitter
  • email

Want more?

We thought you might.

Join the hundreds of thousands of people who are taking control of their personal finances and investments with tips and market insights delivered straight to their inboxes.