Learn how to calculate Value at Risk (VaR) to effectively assess financial risks in portfolios, using historical, variance-covariance, and Monte Carlo methods.

It combines two related statistical concepts: variance and standard deviation. Correlation is used in several facets of financial analysis including the calculation of portfolio standard deviation.

How to calculate Standard Deviation in Excel The Standard Deviation is a term used in statistics. The term describes how much the numbers if a set of data vary from the mean.

In finance, the variance is commonly used to calculate how each asset in a portfolio performs in relation to the other assets in the portfolio.