title = "Portfolio Risk Metrics"

content = """
Portfolio risk metrics provide quantitative measures of potential losses and volatility, enabling informed risk management and position sizing decisions. These calculations form the foundation of modern portfolio theory and risk management practices.

**Standard Deviation** measures the dispersion of returns around the mean, providing a basic measure of volatility. Higher standard deviation indicates greater price variability and potential for extreme outcomes.

**Sharpe Ratio** evaluates risk-adjusted returns by dividing excess returns (above risk-free rate) by portfolio volatility. Higher ratios indicate better compensation for risk taken, though the metric assumes normally distributed returns.

**Sortino Ratio** modifies Sharpe ratio calculations to consider only downside volatility, focusing on harmful volatility that investors seek to avoid. This asymmetric measure better reflects investor preferences for upside potential without downside risk.

**Maximum Drawdown** represents the largest peak-to-trough decline experienced by a portfolio, measuring the worst-case scenario for capital erosion. Recovery time from maximum drawdown provides insight into portfolio resilience.

**Value-at-Risk (VaR)** estimates potential losses over a specific time horizon at a given confidence level, typically calculated using historical simulation, parametric methods, or Monte Carlo simulation.

**Expected Shortfall (ES)** measures average losses beyond the VaR threshold, providing a more comprehensive view of tail risk than VaR alone. ES calculations reveal the magnitude of extreme loss scenarios.

**Beta** measures systematic risk relative to a market benchmark, with values above 1 indicating higher volatility than the market and below 1 indicating lower volatility.

**Correlation Coefficients** quantify relationships between asset returns, ranging from -1 (perfect negative correlation) to +1 (perfect positive correlation). Correlation matrices inform diversification strategies and hedging decisions.

**Stress Testing** evaluates portfolio performance under extreme scenarios, including historical crises, hypothetical events, and sensitivity analyses across multiple risk factors.

**Scenario Analysis** examines portfolio response to specific market events, including interest rate shocks, geopolitical developments, and sector-specific disruptions.

**Liquidity Risk Metrics** assess the ability to liquidate positions without significant price impact, including bid-ask spreads, trading volumes, and time-to-liquidate calculations.

**Concentration Risk Measures** evaluate exposure to individual securities, sectors, or counterparties, using metrics like Herfindahl-Hirschman Index and position size limits.

**Tail Risk Indicators** monitor extreme outcome probabilities, including kurtosis measures and jump risk assessments.

Effective risk metrics require regular updating, stress testing validation, and integration with trading strategies to maintain portfolio stability.
"""

version = "0.0.1"
