Portfolio Risk Calculator

Assess portfolio risk from asset mix, volatility and concentration in the largest holding.

About Portfolio Risk Calculator

Volatility comes from the asset-class mix, but real portfolio risk also depends on concentration, since a single large holding reintroduces specific risk that the asset-class view assumes away. A portfolio can look conservatively allocated and still be risky if one position dominates, which is why concentration is scored separately.

Formula

Portfolio Risk

Portfolio variance combines asset-class weights and volatilities; risk score also penalises concentration

plausible worst year: Roughly two standard deviations below the mean
concentration: Weight of the single largest holding

Worked example

With the default values below, Portfolio Risk Calculator returns Estimated Portfolio Volatility of 11.39%. Change any input above and every figure here is recalculated in your browser.

Inputs used

Allocation to equitiesaccepts 0–100 %: 70 %
Allocation to bondsaccepts 0–100 %: 25 %
Largest single holdingaccepts 0–100 %: 12 %
Number of holdingsminimum 1: 24
Assumed equity volatilityaccepts 0–100 %: 16 %

Results

Estimated Portfolio Volatility: 11.39%
Risk Score: 46.2 /100
Concentration Assessment: Well diversified
Plausible Worst Year: -22.79%
Diversification Score: 71.8 /100

Step by step

1Values used
2Portfolio Risk
3Estimated Portfolio Volatility= 11.39
4Risk Score= 46.2 /100
5Concentration Assessment= Well diversified
6Plausible Worst Year= -22.79
7Diversification Score= 71.8 /100

Assumptions and limits

The result is derived only from the 5 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax, fees or charges or compounding frequency into account.
Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

How is Portfolio Risk calculated?

Portfolio variance combines asset-class weights and volatilities; risk score also penalises concentration Volatility comes from the asset-class mix, but real portfolio risk also depends on concentration, since a single large holding reintroduces specific risk that the asset-class view assumes away.

Why does Portfolio Risk matter?

A portfolio can look conservatively allocated and still be risky if one position dominates, which is why concentration is scored separately.

What values do I need to enter?

This calculator takes 5 inputs: Allocation to equities, Allocation to bonds, Largest single holding, Number of holdings, Assumed equity volatility. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.