Value at Risk - VaR
A technique used to estimate the probability of portfolio losses based on the statistical analysis of historical price trends and volatilities.
Investopedia Commentary
VaR is commonly used by banks, security firms, and companies that are involved in trading energy and other commodities. VaR is able to measure risk while it happens and is an important consideration when firms make trading or hedging decisions.
Related Links
Introduction to Value at Risk (VAR) - Part 1
Introduction to Value at Risk (VAR) - Part 2
Why Do Markets Move?
Portfolio Protection In Diversification And Discipline
The Uses And Limits Of Volatility
See also: Mark to Market - MTM, Risk, Volatility
Also spelled: VAR, varVAR, VAR