Create a summary of risk metrics

Example 1: Key Risk Metrics for a Corporate Bond Portfolio

Financial Scenario/Product: Corporate Bond Portfolio

Language: English

Summary of Key Risk Metrics for Corporate Bond Portfolio:

1. Credit Rating Distribution: The proportion of bonds categorized as investment-grade vs. non-investment-grade, reflecting the portfolio’s exposure to credit risk.
2. Duration (Interest Rate Sensitivity): The average duration of the portfolio, indicating its sensitivity to changes in interest rates.
3. Concentration Risk: Percentage of exposure to individual issuers or sectors that may lead to higher vulnerability.
4. Default Rate: Historical and forecasted default rates, providing insight into potential credit losses.
5. Yield-to-Maturity (YTM): Indicates the expected return on the portfolio, factoring in credit and market risks.

Example 2: Key Risk Metrics for an Equity Portfolio

Financial Scenario/Product: Equity Portfolio

Language: English

Summary of Key Risk Metrics for Equity Portfolio:

1. Beta (Market Sensitivity): The portfolio’s volatility relative to the broader market benchmark.
2. Value at Risk (VaR): Quantifies potential losses under normal market conditions over a defined time horizon.
3. Sector and Geographic Allocation: The percentage breakdown of investments across industries and regions, highlighting diversification or concentration risks.
4. Sharpe Ratio: A measure of risk-adjusted returns, evaluating whether returns are commensurate with the portfolio’s risk level.
5. Maximum Drawdown: The largest observed loss from a peak value, illustrating downside risk.