Exposure Analysis
Exposure Analysis provides a detailed view of structural dependencies within a portfolio.
While allocation shows where capital is placed, exposure analysis reveals what that capital depends on and where risk is concentrated.
What Exposure Analysis Shows
Exposure Analysis breaks down portfolio dependencies across multiple dimensions, including:
Protocol exposure
Chain exposure
Asset class exposure
Liquidity source overlap
High-risk concentration zones
This view is designed to surface hidden concentration and correlated risk.
Protocol Exposure
Protocol exposure measures how much of the portfolio depends on a specific protocol or smart contract system.
High protocol exposure increases sensitivity to:
Smart contract risk
Governance decisions
Technical failures or exploits
Even when capital is spread across multiple strategies, dependency on a single protocol can represent a significant risk.
Chain Exposure
Chain exposure reflects dependency on a specific blockchain network.
High chain exposure may introduce risks related to:
Network congestion
Validator or consensus issues
Bridge dependencies
Ecosystem-wide events
Diversifying across chains does not always reduce risk if shared infrastructure remains a dependency.
Asset Class Exposure
Asset class exposure categorizes positions by underlying asset type, such as:
Stablecoins
Volatile assets
Yield-bearing tokens
Synthetic or derivative assets
This helps assess sensitivity to market regimes and macro conditions.
Liquidity and Correlation
Exposure Analysis also considers overlapping liquidity sources and correlated behavior under stress.
Positions that rely on the same liquidity pools or respond similarly to volatility may amplify losses during adverse conditions.
High-Risk Exposure Identification
RAX highlights high-risk exposure areas based on:
Concentration thresholds
Volatility sensitivity
Historical stress behavior
Detected anomalies
These indicators help prioritize risk reduction efforts.
How Exposure Analysis Is Used
Exposure Analysis supports:
Identification of structural risk
Refinement of allocation constraints
De-risking decisions
Simulation and stress testing
Allocation Engine recommendations
It is a foundational input to disciplined capital management.
Practical Use Cases
Exposure Analysis is particularly useful when:
Evaluating whether a portfolio is truly diversified
Identifying hidden dependencies before increasing allocation
Responding to rising market volatility
Preparing for adverse scenarios
Summary
Exposure Analysis reveals the structure beneath allocation.
By making dependencies visible, RAX enables users to manage concentration risk, reduce hidden correlations, and build more resilient portfolios.
Last updated