# Value at Risk (VaR)

*Risk & Portfolio — Finicade finance glossary*

A single number summarising downside: the most you'd expect to lose over a set period at a given confidence, say '1% chance of losing more than $1m in a day'. Ubiquitous in banks — and famously blind to the rare disasters beyond its threshold.

**Also known as:** var, var definition, the full var recipe, portfolio var, monte carlo var, var tools, var limits

**Related terms:** [Expected Shortfall (CVaR)](https://finicade.com/glossary/expected-shortfall), [Volatility](https://finicade.com/glossary/volatility), [Stress Testing](https://finicade.com/glossary/stress-testing), [Backtesting](https://finicade.com/glossary/backtesting)

**Taught in:** Risk Arena — VaR: One Number for the Tail

Source: https://finicade.com/glossary/value-at-risk