# Coherent Risk Measure

*Risk & Portfolio — Finicade finance glossary*

A risk measure that behaves sensibly — most importantly, that says a diversified portfolio is never riskier than its parts (subadditivity). VaR can fail this test; expected shortfall passes it.

**Also known as:** subadditivity, coherent risk measure

**Related terms:** [Expected Shortfall (CVaR)](https://finicade.com/glossary/expected-shortfall), [Value at Risk (VaR)](https://finicade.com/glossary/value-at-risk), [Diversification](https://finicade.com/glossary/diversification)

**Taught in:** Risk Arena — Expected Shortfall: Beyond VaR

Source: https://finicade.com/glossary/coherence