On this page Purpose Calculation Visual explanation Interpretation Understand the investment calculation
What the Portfolio Risk Contribution Calculator is for Estimate each of two assets' additive contribution to portfolio volatility.
It makes the prices, cash flows, rates, time periods, weights, and model conventions explicit so you can inspect an entered scenario without hidden live-market assumptions.
Calculation structure
RC_i = weight_i × covariance(asset_i, portfolio) ÷ portfolio volatility.
Visual explanation
See how the inputs become the result Assets and weights Return contribution
+ Volatility and dependence Risk estimate
RC_i = weight_i × covariance(asset_i, portfolio) ÷ portfolio volatility. Read the estimate correctly
Use the result within its boundaries A 50/50 two-asset scenario reports contributions that sum to portfolio volatility.
Contributions can be negative when an asset hedges the portfolio. Inputs describe one stable covariance scenario.
Quick guide
How to use this calculator Enter the cash flows, values, rates, timing, or portfolio assumptions named in the fields. Use one consistent period and currency convention throughout the scenario. Read the calculator-specific model limits before interpreting the result. Calculation method
Calculation method RC_i = weight_i × covariance(asset_i, portfolio) ÷ portfolio volatility.
Model, simulation, root, square-root, and compounding outputs are estimates and are visibly marked approximate.
Worked example
Worked example A 50/50 two-asset scenario reports contributions that sum to portfolio volatility.
RC_i = weight_i × covariance(asset_i, portfolio) ÷ portfolio volatility.
Supported inputs
Precision and limits Visible input limits Inputs support up to 12 decimal places and lists support at most 1,200 rows. Iteration and simulation bounds are displayed in their fields.
International scope No exchange, tax system, reporting standard, currency, fund rule, trading calendar, or market convention is selected automatically.
Decision boundary Outputs are entered scenarios, not valuations, forecasts, risk limits, executable trades, suitability decisions, or recommendations.
Calculator-specific assumptions Contributions can be negative when an asset hedges the portfolio. Inputs describe one stable covariance scenario.
