Portfolio Risk Overview
The Portfolio Risk Overview provides a consolidated view of risk across all positions managed or monitored within RAX.
It is designed to answer a critical question:
How risky is my portfolio right now, and where is that risk coming from?
This view shifts the focus from market-level conditions to portfolio-specific exposure and vulnerability.
What the Portfolio Risk Overview Shows
The Portfolio Risk Overview aggregates portfolio-level metrics into a single dashboard, including:
Portfolio Risk Score
Value at Risk (VaR)
Health Factor indicators
Exposure distribution across protocols, chains, and assets
Recent changes in portfolio risk
These metrics describe both the magnitude and structure of portfolio risk.
Portfolio Risk Score
The Portfolio Risk Score summarizes the relative risk of the entire portfolio under current conditions.
Lower values indicate more stable positioning.
Higher values indicate increased sensitivity to market stress.
The score reflects:
Asset and protocol composition
Exposure concentration
Volatility and liquidity conditions
Correlation between positions
It should be interpreted alongside supporting metrics rather than in isolation.
Value at Risk (VaR)
Value at Risk estimates the potential loss of a portfolio over a defined time horizon under normal market conditions.
VaR helps users:
Quantify downside risk
Compare risk across different portfolio configurations
Set allocation and drawdown constraints
VaR is a probabilistic estimate and does not capture extreme or unprecedented events.
Health Factor
The Health Factor indicates the safety margin of collateralized or leveraged positions.
A higher Health Factor suggests greater distance from liquidation thresholds.
A lower Health Factor indicates increased vulnerability to adverse price movements.
Monitoring Health Factor is essential for portfolios that include lending, borrowing, or leveraged strategies.
Exposure Breakdown
The Portfolio Risk Overview includes exposure analysis across:
Protocols
Chains
Asset classes
This breakdown helps identify concentration risk and structural dependencies that may not be apparent from allocation alone.
Tracking Risk Over Time
Risk metrics in the Portfolio Risk Overview are dynamic.
Monitoring changes over time allows users to:
Detect emerging risk
Identify deterioration before losses occur
Evaluate the impact of rebalancing decisions
Trend analysis is often more informative than single-point observations.
How to Use the Portfolio Risk Overview
This view is best used to:
Assess overall portfolio stability
Identify primary sources of risk
Decide whether rebalancing or de-risking is required
Validate allocation decisions against risk constraints
It typically follows a review of the Risk Overview and precedes deeper exposure or simulation analysis.
Limitations
The Portfolio Risk Overview does not:
Predict liquidation events
Eliminate risk
Replace protocol-level analysis
It provides a structured summary, not a guarantee of safety.
Summary
The Portfolio Risk Overview offers a clear, consolidated view of portfolio risk.
It helps users understand how individual positions interact, where vulnerabilities exist, and how risk evolves over time, enabling more disciplined capital management.
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