# value-at-risk

Noun

(*uncountable*)

- (finance, banking) A widely used measure of the risk of loss on a specific portfolio of financial assets. For a given portfolio, probability and time horizon, VaR is a threshold value such that the probability that the mark-to-market loss on the portfolio over the given time horizon exceeds this value (assuming normal markets and no trading) is the given probability level.

## value at risk - Investment & Finance Definition

A risk-management technique that measures market risk found in portfolios and decomposes it into individual risk factors that can be quantified and managed. Statistical analysis can be used to estimate the potential loss from adverse price movements. Although value at risk is a useful tool, it only provides an estimate of what losses might be and only gives a probability of events happening.