Offering sources of risk and return specific to local markets.
Barra's multiple-factor risk models cover the world's major equity markets and help to build superior portfolios by offering sources of risk and return specific to local markets.
Stock price movements are influenced by various common factors, such as industry group, style characteristics and fundamental data. These factors allow a portfolio's risk to be predicted and decomposed into meaningful terms.
Barra's multiple-factor risk models compute an asset's or a portfolio's sensitivities to these factors in order to accurately forecast risk. Our single country models are carefully researched to identify the unique set of factors most able to explain risk in that market.
Barra multi-factor models not only forecast risk, but provide a clear, dimensionalized view of the sources of risk. By attributing risk to common factors and risk unique to an asset, managers can act to magnify or neutralize exposure according to their judgment and insights.
Key Benefits
Coupled with the Barra Portfolio Manager, Barra's equity risk models provide performance-enhancing benefits:
| Communicate portfolio strategy clearly to clients and consultants. | |
| Quantify risk and isolate its common-factor and asset-specific sources. | |
| Construct optimal portfolios and run trade scenarios. | |
| Evaluate performance by isolating sources of risk and return. | |
| Compute predicted portfolio tracking error versus any industry or user-defined benchmark. | |
| Create optimized portfolios to efficiently track any index with fewer assets. |
