Value at Risk
A historical or model-based estimate of a loss threshold over a chosen horizon and confidence level.
Plain languagePractical exampleConnected reading
01
What is it?
A historical or model-based estimate of a loss threshold over a chosen horizon and confidence level.
02
Why does it matter?
It helps monitor portfolio risk on a common scale but does not describe losses beyond the threshold.
03
How should it be read?
State horizon, confidence level, data window, distribution assumptions and stress tests together.
04
Common mistake
Treating 99% VaR as the worst possible loss or a guaranteed cap.
A simple example
A one-day 99% VaR of TRY 100,000 means larger losses may be rare, not impossible or capped.