Sentences with phrase «tail risk events»

Throughout the business cycle we are constantly updating our financial models to account for changes in the probability of tail risk events and other inefficiencies that might alter how our clients perceive risk.

Broader options market pricing better reflects such tail risk events.

Not exact matches

Buying a property with an income suite may have an edge over the fixer - upper in the event the tail risk of a housing crash materializes.

Tail risks include market events that generally would have a small chance of occurring.

First, the tail risks (low - probability, high - impact events) in the global economy — a eurozone breakup, the US going over its fiscal cliff, a hard economic landing for China, a war between Israel and Iran over nuclear proliferation — are lower now than they were a year ago.

Global Capitalism is trapped in its own Prisoner's Dilemma; forty four years after the end of the Bretton Woods System global central banks have manipulated the cost of risk in a competition of devaluation leading to a dangerous build up in debt and leverage, lower risk premiums, income disparity, and greater probability of tail events on both sides of the return distribution.

We define them as those who responded «Agree» or «Strongly Agree» to three questions: «Risk management is an integral part of our investment process and actively addressed on a systematic, ongoing basis», «My organization has a strong risk management culture», and «I am confident that our portfolio has appropriate downside protection for the next tail event.&raRisk management is an integral part of our investment process and actively addressed on a systematic, ongoing basis», «My organization has a strong risk management culture», and «I am confident that our portfolio has appropriate downside protection for the next tail event.&rarisk management culture», and «I am confident that our portfolio has appropriate downside protection for the next tail event.»

The failure of risk models becomes the most evident during tail events, where correlations rise drastically.

Moreover, it helps to manage risk more effectively by protecting against infrequent or unlikely but consequential negative events, often referred to as «tail risks.»

For normally distributed risks, the probability falls off fast enough in the tails that you can ignore the really low - probability / high - consequence events.

This is similar to the argument Benoit Mandelbrot and Nassim Taleb made about Mandelbrot's observation that fluctuations in markets for shares, futures, and commodities are not normally distributed but have fat tails: this means that standard risk - management practices (e.g., stress - testing portfolios) will fail to account properly for extremely unlikely events.

* On an overall basis, the report states that while «global tail risks have diminished (meaning the risk of a systemic shock to the global financial system that could be caused by an event like a sovereign debt default), the global outlook is slightly weaker than projected in October».