Strategic Risk Management
  • Author : Campbell R. Harvey
  • Release Date : 04 May 2021
  • Publisher : John Wiley & Sons
  • Genre : Business & Economics
  • Pages : 256
  • ISBN 13 : 9781119773917

Download Strategic Risk Management eBook in PDF, Epub and Kindle

Book Description: A fresh approach to managing risk in the most challenging market conditions Strategic Risk Management presents an innovative approach to portfolio design. Often the risk management function is a series of tripwires that are activated after the portfolio is already in trouble. Strategic Risk Management presents a framework that seeks to integrate the initial portfolio design and the risk management function. Much of the book’s research was conducted pre-COVID-19; the market selloff in March 2020 offers a unique out of sample experiment that provides evidence supportive of the approach. A crucial ingredient in this integrative design is to understand the performance of various investment strategies in stressful market conditions. The book begins by measuring the performance of various assets and strategies that purport to provide hedging abilities: such as put options and long gold positions. While put options are an extremely reliable, few would want to give up 700 basis points a year to buy this type of insurance. And even if gold does not have the type of drag that long options strategies do, gold turns out to be an unreliable hedge. We focus on two investments that historically offer impressive protection in adverse events: trend following strategies and quality-based equity strategies. We show that performance of trend following strategies is naturally linked to the payoff of a long call and long put position. This property is particularly useful in mitigating portfolio drawdowns. The book also considers operational strategies such as portfolio rebalancing. Most investors routinely rebalance their portfolios, for example, to a 60/40 equity/bond mix. However, few investors realize that a mechanical rebalancing strategy increases drawdowns and portfolio risk. The reason is simple. In extended equity sell offs, the rebalancing strategy is to buy, which increases drawdowns. Strategic Risk Management offers an intuitive solution. If the trend following signal suggests that the drawdown will continue, delay the rebalancing. We call this strategic rebalancing. The book contains various other insights, including analyzing the impact of a portfolio strategy that targets a certain risk level. This technique reduces allocations to the riskiest assets when volatility spikes. Given that surges in volatility are usually associated with plunging markets, this strategy also reduces drawdowns. The reader of this book will: Learn how to incorporate risk management into the core portfolio design, rather than treating it as an afterthought; Gain a deeper understanding of concepts such as portfolio rebalancing; Acquire tools to achieve a more balanced return stream through volatility targeting of higher-risk asset classes; Obtain an overview of various defensive strategies, and learn which strategies offer the most reliable and affordable protection; Be equipped with a set of rules that allows for the early detection of strategies or managers that have faded. Strategic Risk Management is a thought-provoking resource for developing your portfolio design and risk management skills.

Strategic Risk Management

Strategic Risk Management

Author : Campbell R. Harvey,Sandy Rattray,Otto Van Hemert
Publisher : John Wiley & Sons
Genre : Business & Economics
Get Book

A fresh approach to managing risk in the most challenging market conditions Strategic Risk Management presents an innovative approach to portfolio design. Often the risk management function is a series of tripwires that are activated after the portfolio is already in trouble. Strategic Risk Management presents a framework that seeks ...

Strategic Risk Management

Strategic Risk Management

Author : Paul C. Godfrey,Emanuel Lauria,, John Bugalla,Kristina Narvaez
Publisher : Berrett-Koehler Publishers
Genre : Business & Economics
Get Book

This book presents a new approach to risk management that enables executives to think systematically and strategically about future risks and deal proactively with threats to their competitive advantages in an ever more volatile, uncertain, complex, and ambiguous world. Organizations typically manage risks through traditional tools such as insurance and ...

Strategic Risk Management

Strategic Risk Management

Author : David Iverson
Publisher : John Wiley & Sons
Genre : Business & Economics
Get Book

A comprehensive guide to the key investment decisions all investors must make and how to manage the risk that entails Since all investors seek maximize returns balanced against acceptable risks, successful investment management is all about successful risk management. Strategic Risk Management uses that reality as a starting point, showing ...

The Routledge Companion to Strategic Risk Management

The Routledge Companion to Strategic Risk Management

Author : Torben Juul Andersen
Publisher : Routledge
Genre : Business & Economics
Get Book

Managing risk in and across organizations has always been of vital importance, both for individual firms and for the globalized economy more generally. With the global financial crisis, a dramatic lesson was learnt about what happens when risk is underestimated, misinterpreted, or even overlooked. Many possible solutions have been competing ...

Strategic Risk Management Practice

Strategic Risk Management Practice

Author : Torben Juul Andersen,Peter Winther Schrøder
Publisher : Cambridge University Press
Genre : Business & Economics
Get Book

At a time when corporate scandals and major financial failures dominate newspaper headlines, the importance of good risk management practices has never been more obvious. The absence or mismanagement of such practices can have devastating effects on exposed organizations and the wider economy (Barings Bank, Enron, Lehmann Brothers, Northern Rock, ...

Strategic Risk Taking

Strategic Risk Taking

Author : Aswath Damodaran
Publisher : Pearson Prentice Hall
Genre : Business & Economics
Get Book

Groundbreaking book that redefines risk in business as potentially powerful strategically to help increase profits. bull; Get out of your "defensive crouch ": learn which risks to avoid, which to mitigate, and which to actively exploit. bull; Master risk management techniques that can drive competitive advantage, increase firm value, and enhance ...

Strategic Risk Leadership

Strategic Risk Leadership

Author : Torben Juul Andersen,Peter C. Young
Publisher : Routledge
Genre : Business & Economics
Get Book

Modern risk management as practiced today faces significant obstacles—we argue—primarily due to the fundamental premise of the concept itself. It asserts that we are mainly dealing with measurable, quantifiable risks and that we can manage the uncontrollable by relying on formal control-based systems, which has produced a general ...

Enterprise Risk Management

Enterprise Risk Management

Author : Gregory Monahan
Publisher : John Wiley & Sons
Genre : Business & Economics
Get Book

Defining enterprise risk management -- Strategic objectives -- At-risk concept -- SOAR (the methodology) : strategic objectives at risk -- SOAR (the process) -- Set metrics for defined strategic objectives -- Observe metric values -- Analyze movements in metrics -- React to the metric analysis -- SOAR dashboard -- Existing enterprise ...

Strategic Reputation Risk Management

Strategic Reputation Risk Management

Author : J. Larkin
Publisher : Springer
Genre : Business & Economics
Get Book

Reputation is a commercially valuable asset. This book focuses upon how enhanced reputation can contribute to commercial asset management through increased share price premium and competitive performance, while reputation loss can significantly erode the ability of the business to successfully retain market share, maximise shareholder value, raise finance, manage debt ...

Strategic Risk Management

Strategic Risk Management

Author : Torben Juul Andersen,Johanna Sax
Publisher : Routledge
Genre : Business & Economics
Get Book

Organizations face challenges in adapting their current business and operational activities to dynamic contexts. Successful companies share a common characteristic of dealing with the emergent risks and threats in responses that generate viable solutions. Strategic risk management (SRM) is a multidisciplinary and rather fractured field of study, which creates significant ...

Managing Risk and Opportunity

Managing Risk and Opportunity

Author : Torben Juul Andersen,Maxine Garvey,Oliviero Roggi
Publisher : OUP Oxford
Genre : Business & Economics
Get Book

This book promotes good risk governance and risk management practices to corporate managers, executives, and directors wherever they operate around the world. The major corporate scandals have their roots in governance failure pointing to the link between risk governance and good performance outcomes. This topic is timely and of interest ...

Strategic Risk Leadership

Strategic Risk Leadership

Author : Torben Juul Andersen,Peter C. Young
Publisher : Routledge
Genre : Business & Economics
Get Book

This casebook extends Strategic Risk Leadership: Engaging a World of Risk, Uncertainty and the Unknown, bringing theory and practice grounded in the first book to life with an array of applicable, real-world examples. The book enables critical thinking about the current state of risk management and ERM, demonstrating contemporary shortcomings ...

War as Risk Management

War as Risk Management

Author : Yee-Kuang Heng
Publisher : Routledge
Genre : History
Get Book

This major new study shows how war can be thought of in terms of proactive risk management rather than in terms of conventional threat response. It addresses why the study of ‘risk management’ has helped fields such as sociology and criminology conceptualize new policy challenges but has made limited impact ...

Strategic Risk Taking

Strategic Risk Taking

Author : Aswath Damodaran
Publisher : Ft Press
Genre : Business & Economics
Get Book

Groundbreaking book that redefines risk in business as potentially powerful strategically to help increase profits. Get out of your "defensive crouch": learn which risks to avoid, which to mitigate, and which to actively exploit....

Risk Management

Risk Management

Author : Paul Hopkin
Publisher : Kogan Page Publishers
Genre : Business & Economics
Get Book

Risk management is not just a topic for risk professionals. Managers and directors at all levels must be equipped with an understanding of risk and the tools and processes required to assess and manage it successfully. Risk Management offers a practical and structured approach while avoiding jargon, theory and many ...