# Wrong-Way Risk

*Risk & Portfolio — Finicade finance glossary*

When your exposure to a counterparty grows at exactly the moment they're most likely to default — the two risks moving together, badly. A subtle trap that ordinary counterparty models miss.

**Related terms:** [Counterparty Risk](https://finicade.com/glossary/counterparty-risk), [Credit Risk](https://finicade.com/glossary/credit-risk), [Correlation](https://finicade.com/glossary/correlation)

**Taught in:** Risk Arena — Credit Risk Enters the Arena

Source: https://finicade.com/glossary/wrong-way-risk