Investor Analytics Releases White Paper on Risk Aggregation


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Investor Analytics has released a new white paper detailing the benefits and practicalities of risk aggregation. The paper, called Adding It All Up: The Myths and Realities of Risk Aggregation along with the Risk Aggregation Survival Guide, debunks popular aggregation myths.

According to Investor Analytics, the white paper puts to the test the commonly held myth that "investors should tread gingerly when asking for transparency."

"Clearly, it is no longer out of the norm to request position level transparency," said Damian Handzy, CEO of Investor Analytics, during a webinar to promote the new white paper. "In fact, it's out of the norm not to. Risk aggregation is a powerful tool that analyzes the dynamics of the portfolio, determines how its constituent parts move in concert with one another and shows a meaningful and accurate summary of the portfolio risks -- often revealing aspects that would otherwise remain hidden."

Investor Analytics' Risk Aggregation Survival Guide states that "risk aggregation is 80% data management and 20% analysis." The company stated that 85% of poll respondents during their recent webinar agreed that data is the most challenging aspect of of risk aggregation. The webinar also made the point that being less than totally transparent is not always unacceptable.

"Not all managers provide transparency, but using their returns can deliver extra value because the data provides dynamics over time," said Daniel Siliski, risk manager at FourWinds Capital Management, during the webinar. "By including positions-based, exposure-based and returns-based models, IA's suite of services offers many routes to achieving risk aggregation."