Portfolio Management and Risk Analysis

Portfolio Management

Portfolio management involves the strategic management of investments to meet specific financial objectives. It includes selecting and managing a mix of investments, such as stocks, bonds, and other assets.

Key Concepts:

• Asset Allocation
• Diversification
• Investment Goals and Time Horizons
• Active vs. Passive Management

Risk Analysis

Risk analysis is the process of identifying and assessing potential risks that could impact the value of an investment portfolio. Understanding risks helps in making informed investment decisions.

Types of Risks:

• Market Risk
• Credit Risk
• Liquidity Risk
• Inflation Risk
• Geopolitical Risk

Methods of Risk Analysis

Several quantitative and qualitative methods are used to analyze and manage investment risk.

Common Methods Include:

• Value at Risk (VaR)
• Stress Testing
• Monte Carlo Simulation
• Beta and Standard Deviation
• Scenario Analysis