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Downside risk is the financial risk associated with losses. That is, it is the risk of the actual return being below the expected return, or the uncertainty about the ...
Downside risk (DR) is measured by target semi-deviation (the square root of target semivariance) and is termed downside deviation. It is expressed in percentages and therefore allows for rankings in the same way as standard deviation. An intuitive way to view downside risk is the annualized standard deviation of returns below the target.
The upside-potential ratio is a measure of a return of an investment asset relative to the minimal acceptable return. The measurement allows a firm or individual to choose investments which have had relatively good upside performance, per unit of downside risk.
The selloffs "reflect more fear than real fundamental downside risk," BMO analysts argued in a note last month. ... meaning there's likely little risk to the shares of companies like Eli Lilly and ...
Risk is the lack of certainty about the outcome of making a particular choice. Statistically, the level of downside risk can be calculated as the product of the probability that harm occurs (e.g., that an accident happens) multiplied by the severity of that harm (i.e., the average amount of harm or more conservatively the maximum credible amount of harm).
Despite its appeal, this investment carries substantial risks for investors, including unpredictable dividends, limited upside potential, and an undefined downside risk.
The Sortino ratio measures the risk-adjusted return of an investment asset, portfolio, or strategy. [1] It is a modification of the Sharpe ratio but penalizes only those returns falling below a user-specified target or required rate of return, while the Sharpe ratio penalizes both upside and downside volatility equally.
The stock market could be pressured further if the bottom drops out of corporate profits this year amid raging inflation and Fed rate hikes, Citi warns.