Value at Risk Calculator – Estimate Potential Loss

Free Value at Risk (VaR) Calculator

Estimate Potential Loss in Your Investments

The Value at Risk (VaR) Calculator helps investors estimate the maximum potential loss in a portfolio over a specified time period and confidence level. By entering the portfolio value, expected return, volatility, and confidence interval, this tool calculates the probable loss you might face in adverse market conditions. VaR is a widely used risk management metric that gives both novice and professional investors a clear picture of downside risk. Using this calculator allows better planning, informed decision-making, and improved portfolio risk management strategies, helping you understand and manage potential investment losses effectively.

Value at Risk (VaR) Calculator

Estimate the potential loss of an investment portfolio.

Portfolio Value

Confidence Level (%)

Standard Deviation (%)

Time Period (Days)

Currency

Calculation Results

Value at Risk (VaR)

$0.00

VaR as % of Portfolio

0.00%

Result Interpretation

Formula Used: Portfolio Value × Z-score × Std Dev × √(Time / 252)

Value at Risk VaR Calculator Guide

The Formula We Use

Parametric VaR percent at confidence c = Z at c times portfolio standard deviation minus portfolio mean return
Dollar VaR = Portfolio value times VaR percent
Historical VaR percent is the absolute value of the return at the one minus confidence quantile of the return series
Time scaling: multi day VaR is about single day VaR times the square root of days
Meaning: VaR at confidence c is the loss level that is exceeded with probability one minus c over the chosen period

Example Calculation

Portfolio value 100,000

Mean daily return 0.05 percent

Daily standard deviation 1.20 percent

Confidence 95 percent

Z at 95 percent ≈ 1.645
VaR percent = 1.645 times 1.20 percent minus 0.05 percent = 1.924 percent
Dollar VaR = 100,000 times 1.924 percent ≈ 1,924
At 95 percent confidence the expected one day loss should not exceed about 1,924 in normal conditions

How to Use This Calculator

Enter portfolio value mean return and standard deviation for the chosen period such as daily or monthly.
Select a confidence level such as 90 percent 95 percent or 99 percent.
The tool applies the parametric method to compute VaR percent and Dollar VaR.
For multi day VaR multiply the one day VaR by the square root of the number of days.

Tips for Better Interpretation

Match frequencies: use the same period for returns and volatility.
Mind non normal tails: real markets show fat tails so VaR can understate risk in stress events.
Back testing helps: compare past breaches of VaR with expected breach counts.
Use Expected Shortfall: for tail focus consider expected shortfall also called conditional VaR.
Watch correlation: portfolio VaR depends on co movement across assets.

This is educational content and not financial advice.

Benefits of Using Our
Value at Risk (VaR) Calculator

Quantify Potential Losses

Estimate the maximum loss your portfolio could face over a specific time frame with given confidence.

Better Risk Management

Helps investors make informed decisions to minimize potential portfolio losses.

Supports Multiple Assets

Calculate VaR for single assets or entire portfolios for a comprehensive risk view.

Beginner Friendly

Easy to use interface with clear explanations for investors new to risk metrics.

Mobile Responsive

Works seamlessly on all devices including mobile, tablet, and desktop.

Secure & Private

All calculations are done locally; your data is never stored or shared.

Frequently Asked Questions

What is a Value at Risk (VaR) Calculator?

VaR Calculator estimates the maximum potential loss of a portfolio over a specified time period at a given confidence level.

Why is VaR important for investors?

It allows investors to quantify risk and prepare strategies to minimize losses in adverse market conditions.

Can I use VaR for multiple assets?

Yes. You can calculate VaR for individual stocks or an entire portfolio for comprehensive risk assessment.

Is this calculator suitable for beginners?

Yes. The tool is user-friendly and presents results clearly, even for users new to risk metrics.

What inputs do I need?

Enter portfolio value, confidence level, and historical volatility or expected return for the calculation.

Is my data secure?

Yes. All calculations are done locally in your browser; no data is transmitted or stored.