Relative Risk
Our relative risk label describes your portfolio’s calculated beta using trailing 1-year daily returns. Beta is a number that reflects the relationship between a portfolio (or stock) and a particular benchmark, for example, the S&P 500 Index. The relative risk label categorizes your portfolio’s beta within ranges. For example, a relative risk of “Average” means your returns will have roughly the same market movement as the S&P 500 Index. A portfolio with “Above Average” beta will tend to amplify moves in the S&P 500, while a portfolio with “Below Average” beta will tend to be less sensitive to moves in the S&P 500. A portfolio with a negative beta generally has returns that move in the opposite direction of the benchmark and is categorized as “Inverse.” The labels are purely descriptive in nature and in no way constitute a judgment as to whether your investments are suitable for you. Beta changes as the market environment or your holdings change.
Beta Category Breakdown
Beta (from–to) | Category |
---|---|
≥ 2.00 | Very High |
1.50–1.99 | High |
1.10–1.49 | Above Average |
0.90–1.09 | Average |
0.50–0.89 | Below Average |
0.00–0.49 | Low |
< 0.00 | Inverse |
Current Holdings Column
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Very High
Your current holdings are generally extremely volatile compared to the S&P 500 -
High
Your current holdings generally have much more market movement than the S&P 500 -
Above Average
Your current holdings generally have more market movement than the S&P 500 -
Average
Your current holdings generally have the same market movement as the S&P 500 -
Below Average
Your current holdings generally have less market movement than the S&P 500 -
Low
Your current holdings are generally less responsive to movements of the S&P 500 -
Inverse
Your current holdings generally move inverse to the S&P 500
One-Year Risk Profile Column
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Very High
Historically your folio has been, in general, extremely volatile compared to the S&P 500 -
High
Historically your folio has had, in general, much more market movement than the S&P 500 -
Above Average
Historically your folio has had, in general, more market movement than the S&P 500 -
Average
Historically your folio has had, in general, the same market movement as the S&P 500 -
Below Average
Historically your folio has had, in general, less market movement than the S&P 500 -
Low
Historically your folio has been, in general, less responsive to movements of the S&P 500 -
Inverse
Historically your folio has, in general, moved inverse to the S&P 500
Absolute Risk
Our absolute risk label describes your portfolio’s volatility (calculated as the annualized standard deviation of the trailing 1-year of daily returns), relative to the historic risk ranges of a benchmark. For example, the S&P 500 Index has trailing 1-year volatility with periods of high and low volatility from which a historical average can be calculated. Your portfolio can be below or above the S&P 500 Index historical risk average just as the S&P 500 Index itself at any point in time can be more or less risky than its long-term historical average. The labels are purely descriptive in nature and in no way constitute a judgment as to whether your investments are suitable for you. The volatility of your portfolio changes as the market environment or your holdings change.
The baseline value with respect to which we compare a portfolio’s or index’s volatility is the average volatility of the S&P 500 Index over the past 15 years. Because the baseline value is the volatility of the S&P 500 Index, a portfolio with “Below Average” absolute risk is not necessarily a low risk portfolio.
Volatility Category Breakdown
Volatility (from–to) | Category |
---|---|
≥ 40.00% | Very High |
30.00%–39.99% | High |
20.00%–29.99% | Above Average |
15.00%–19.99% | Average |
10.00%–14.99% | Below Average |
0.00%–9.99% | Low |
Current Holdings Column
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Very High
Your current holdings indicate that you can tolerate large swings in market value to pursue extreme returns -
High
Your current holdings indicate that you accept high risk in order to pursue high returns -
Above Average
Your current holdings indicate that you accept above average risk for more potential growth -
Average
Your current holdings indicate that you accept average market risk for expected market growth -
Below Average
Your current holdings indicate that you seek income and lower risk -
Low
Your current holdings indicate that you accept less risk
One-Year Risk Profile Column
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Very High
Historically your folio has had large swings in market value -
High
Historically your folio has had high market risk -
Above Average
Historically your folio has had above average market risk -
Average
Historically your folio has had average market risk -
Below Average
Historically your folio has had less market risk -
Low
Historically your folio has had low market risk
Current Holdings
Current holdings risk metrics are calculated from the current holdings of your portfolio using their current market weights. A trailing 1-year portfolio return series is generated using your portfolio’s current holdings to determine the current risk level of your portfolio (as measured by beta and volatility).
One-Year Risk Profile
The one-year risk profile is calculated from your portfolio’s actual trailing 1-year daily returns. (If the portfolio has less than one year’s worth of trailing returns we show N/A.) The one-year risk profile reflects the level of risk your portfolio has experienced over the past year, and not necessarily how risky your portfolio is today. When you compare your one-year risk profile to the metrics under current holdings, you’ll be able to tell if your portfolio has taken on a noticeably different risk level in the course of the previous year. For example, if you were invested solely in government bonds for the majority of the year and then invested in blue chip stocks in the past month, your current holdings risk metrics would show a higher risk portfolio, whereas your one-year risk profile would show lower risk since you held bonds for most of the year.
Selected Benchmark
Choose which benchmark you would like to compare your folio to at the top of the Folio Statistics page (the default is the S&P 500 Index). The risk metrics of the selected benchmark are relative to the S&P 500 Index. When the S&P 500 Index is compared to itself, the beta will always equal 1, but the current volatility can be higher or lower than the historical average of the S&P 500 Index (see Absolute Risk).
Beta Category Breakdown
Beta (from–to) | Category |
---|---|
≥ 2.00 | Very High |
1.50–1.99 | High |
1.10–1.49 | Above Average |
0.90–1.09 | Average |
0.50–0.89 | Below Average |
0.00–0.49 | Low |
< 0.00 | Inverse |
Beta Benchmark Selected
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Very High
The benchmark is generally extremely volatile compared to the S&P 500 -
High
The benchmark generally has much more market movement than the S&P 500 -
Above Average
The benchmark generally has more market movement than the S&P 500 -
Average
The benchmark generally has the same market movement as the S&P 500 -
Below Average
The benchmark generally has less market movement than the S&P 500 -
Low
The benchmark is generally less responsive to movements of the S&P 500 -
Inverse
The benchmark generally moves inverse to the S&P 500
Volatility Category Breakdown
Volatility (from–to) | Category |
---|---|
≥ 40.00% | Very High |
30.00%–39.99% | High |
20.00%–29.99% | Above Average |
15.00%–19.99% | Average |
10.00%–14.99% | Below Average |
0.00%–9.99% | Low |
Volatility Benchmark Selected
-
Very High
The benchmark is currently extremely volatile compared to historical equity market risk -
High
The benchmark is currently much more risky than historical equity market risk -
Above Average
The benchmark is currently more risky than historical equity market risk -
Average
The benchmark is currently within the historical equity market risk boundaries -
Below Average
The benchmark is currently less risky than historical equity market risk -
Low
The benchmark is far below historical equity market risk