| Ticker | Name | Weight | |
|---|---|---|---|
| Total | |||
Volatility is how much a portfolio's value typically swings. We work it out from how each holding has moved over the last 3 years, and how the holdings move together. A yearly volatility of 20% means that in roughly two years out of three, the return lands within 20 percentage points either side of its average — and in one year out of three, outside that.
Factor risk vs stock-specific risk. Part of every share price move comes from big forces that affect many companies at once: the market, interest rates, oil, the tide running for or against profitable companies. The rest is company news: a product launch, a lawsuit, an earnings surprise. We split your risk between the two. Company news can be diversified away by holding more names; the big forces cannot.
For every stock and fund we compare its weekly moves over the last 3 years with the moves of each force, and measure how strongly they travel together (a regression). Recent weeks count more. Your portfolio's number is the weighted average of its holdings'.
The market is measured first, and the other forces are measured on top of it, so nothing is counted twice. Fundamental forces are built from company accounts: we rank the 714 large US companies each quarter and track how the strongest tenth performed against the weakest.
Risk is shared out by how much each force adds to the total, including how it moves together with the others. The shares add to 100%, so you can read them as "this much of the bumpiness comes from here".
Technically these are variance contributions, b·(F·b) per factor, plus each holding's own specific variance.
| Ticker | Name | Weight | Own volatility | Explained by factors | Share of risk |
|---|
Own volatility: how much that holding swings on its own in a year. Explained by factors: how much of its movement comes from the big forces rather than its own news — high for broad funds, lower for single companies. Share of risk: how much of the whole portfolio's bumpiness it accounts for, taking into account its size and how it moves with the rest.
From 3 years of history we know how these forces have moved together. Given your move, we work out the typical move of everything else, then run all of it through your portfolio's sensitivities.
It is an average of what happened before, not a forecast. Relationships change, and they change most in a crisis. The range around the answer is there because company news and the part of the move nothing explains can push the result either way.
Volatility — how much something typically moves up and down. Higher means a bumpier ride, in both directions.
Factor / force — something that moves many shares at once: the market itself, interest rates, the oil price, or a style such as "cheap companies" or "fast growers".
Exposure — how strongly your portfolio follows one of those forces. It describes how the shares have behaved, not what the companies are like.
Stock-specific risk — the part driven by news about individual companies. Holding more names reduces it; it does not touch the market-wide part.
σ (sigma) — a way to say how unusual a move is. Roughly two-thirds of moves are within 1σ; 3σ moves are rare but happen more often than the textbook says.