Risk parity is a portfolio construction technique that scales sections of a portfolio—e.g., stocks, bonds, currencies …, commodities—so that forecasted contributions to net portfolio risk match the budget. Because risks are measured from a point … to find a risk parity weighting that doesn't count on perfectly optimized hedges and is robust to changes in regime …

Most analysis of risk parity treats it as a heuristic and compares backtests of different allocation methods with less … emphasis on investment rationale. The authors investigate risk parity under different settings, highlight its potential utility …

Financial advisors need to assess their clients’ risk profile to properly manage their portfolio risk and comply with … regulatory provisions. Assessing an investor’s financial risk tolerance (FRT) is a challenge in the advisory process and none of … financial advisors looking to improve their customers’ risk profiling …

higher risk-adjusted returns than riskier assets. Consuming the high risk-adjusted returns of safer assets requires leverage …, creating an opportunity for investors with the ability to apply leverage. Risk parity portfolios exploit this opportunity by … equalizing the risk allocation across asset classes, thus overweighting safer assets relative to their weight in the market …