Portfolio Risk Calculator
Analyze portfolio risk metrics including volatility, expected returns, Sharpe ratio, and Value at Risk. Compare your allocation to age-based recommendations and understand risk-adjusted performance.
Asset Allocation
Total Allocation: 100% (balanced)
Investor Profile
Current Portfolio Breakdown
Stocks:60% ($300000.00)
Bonds:30% ($150000.00)
Cash:10% ($50000.00)
REITs:0% ($0.00)
Expected Performance
Expected Return:7.70%/year
Volatility (Std Dev):10.75%
Sharpe Ratio:0.44
Sharpe ratio above 1.0 is good. Higher = better risk-adjusted returns.
Risk Metrics
1-Year Downside:-3.05%
Worst Case Year:-13.80%
Max Drawdown:35%
VaR (95%):$53762.50
VaR: 95% chance losses won't exceed this in a typical year. 5% chance they could.
Allocation Recommendation
Your Stock Allocation:60%
Recommended:55% stocks / 45% bonds
Deviation:5%
Aligned with age and risk tolerance
Time Horizon Assessment
Long horizon - higher equity exposure appropriate
Your Horizon:15 years
Risk Capacity:High
Asset Class Historical Risk/Return
- US Stocks: ~10% return, ~18% volatility. Highest growth potential, highest risk.
- Bonds: ~5% return, ~6% volatility. Stability, income, diversification from stocks.
- Cash: ~2% return, ~0.5% volatility. Safety, liquidity, emergency fund. Lowest return.
- REITs: ~11% return, ~22% volatility. Real estate exposure, dividends, higher volatility.
- International: ~8% return, ~20% volatility. Geographic diversification, currency risk.
- Diversification Benefit: Mixing assets reduces portfolio volatility below weighted average.
- Rebalancing: Review annually. Sell winners, buy losers to maintain target allocation.
Age-Based Allocation Rules
- Rule of 100: Stocks = 100 - Age. Age 30: 70% stocks. Age 60: 40% stocks.
- Rule of 110: More aggressive: Stocks = 110 - Age. For longer life expectancy.
- Rule of 120: Very aggressive: Stocks = 120 - Age. For young investors with long horizon.
- Adjustment Factors: Risk tolerance, job stability, other income sources, legacy goals.
- Glide Path: Target-date funds automatically reduce equity as you approach retirement.
- Minimum Equity: Even retirees need 20-30% equity for growth and inflation protection.