Definitions for tail risk
tail risk

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1. Tail risk

   Tail risk, sometimes called "fat tail risk," is the financial risk of an asset or portfolio of assets moving more than 3 standard deviations from its current price, above the risk of a normal distribution. Prudent asset managers are typically cautious with tail risk involving losses which could damage or ruin portfolios, and not the beneficial tail risk of outsized gains.The common technique of theorizing a normal distribution of price changes underestimates tail risk when market data exhibit fat tails. Tail risk is sometimes defined less strictly: as merely the risk (or probability) of rare events. The arbitrary definition of the tail region as beyond 3 standard deviations may also be broadened, such as the SKEW index which uses the larger tail region starting at 2 standard deviations.

How to pronounce tail risk?

1. Alex

   US English

   David

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   Mark

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   Daniel

   British

   Libby

   British

   Mia

   British

   Karen

   Australian

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   Indian

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   Neerja

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How to say tail risk in sign language?

Numerology

1. Chaldean Numerology

   The numerical value of tail risk in Chaldean Numerology is: 8

2. Pythagorean Numerology

   The numerical value of tail risk in Pythagorean Numerology is: 9

Examples of tail risk in a Sentence

1. Jamie Farquhar:

   Together they have increased the tail risk that the U.S. will look to crack down on it in some way.

2. Ilan Solot:

   The broad dollar outlook remains negative as investors are cutting back on some of the extreme tail risk hedging bets in the markets, some of which were buying dollars.

3. Peter Cecchini:

   Options on VIX futures are right now attractive as an approach to hedging tail risk.

4. Jeremy Lawson:

   For markets the upshot is that the outlook for 2019 is looking better as tensions de-escalate, creating the potential for a re-rating of risk assets as the tail risk of a near-term trade war is partially priced out, this is especially the case in Asia.

5. Naveen Kunam:

   At this juncture I don't think China will attract material interest...it will be the lowest yielding market in the (GBI-EM) index. Plus the tail risk that they could devalue.

References

1. ^ Wikipedia
   https://en.wikipedia.org/wiki/Tail_Risk