Huashang Shengshi Growing Fund Portfolio Risk Measurement Research

With the globalization of economy and the development of financialliberalization, the progress of information technology and the deepening of financialinnovation, the global financial markets rapid development rapidly. But everythinghas two sides and financial market is no exception. On the one hand the rapiddevelopment of the financial market bring a wider range of investment opportunitiesfor investors, meet the demand of the money users, optimize the allocation of capital,so it play a very important role in modern economic and society. On the other handmarket fluctuations have an extensive and profound social influence, and the moreand more drastic fluctuations in the economy makes people pay more attention on riskmanagement. Financial risk not only influence the normal operations and survival ofenterprise and financial institutions seriously, but also serious threat invest interest ofindividuals and institutions, even more it will bring a deeply threat to one country orthe whole global financial and economic. So the risk management has attractedpeople’s more attention, and become an important aspect of the financial investment.The risk of fund, as a typical portfolio, is increasingly revealed. VAR is one kindof effective method used for measuring and controlling risk. This method is appliedquickly and widely in risk management area in foreign countries because of its simpleand clear meaning in expression and widely applicability. But in our country, theapplication of this method is still at the beginning. This paper makes a detailedintroduction of VAR about its background, definition, calculation method, and tools,and then shows its application process by the empirical research. Basis on thisintroduction the paper hope that it will promote the VAR application in domestic, soas to improve our country’s financial institutions`management level and competitionability in risk management field.In front of this paper Risk management theory is introduced in detail, andemphasized the VAR method. About VAR method, introduced the basic concept,different calculation method and development tools, etc. Then introduced the calculation methods of funds· rate of return, and performance evaluation index, etc.Finally, on the basis of theoretical analysis, selected Huashang Shengshi growing fund,reviewed its performance, and made a empirical analysis about the application ofVAR method in risk management process in open mode fund.In this paper finance, economics and securities investment are used as basictheory, and quantitative analysis and qualitative analysis are used as basic researchmethods. The theory analysis reference to a number of literature and then theempirical research by actual investment data give a support to the theoretical analysis.Through the above discussion this paper gives a detail account about VAR methodwhich as a tool of risk management in securities investment, including its principal,calculates methods and application process.Through empirical analysis, this paper validate that VAR is one of effectivemethods in measurement, analysis, controlling and management portfolio risk. Thismethod has wide application in the information disclosure, asset allocation and risklimit distribution.