Value At Risk (VAR) Calculator

Know Your Risk Now: Free VaR Calculator Tool

Use our free Value at Risk Calculator to measure potential portfolio losses in seconds. Fast, accurate VaR results to strengthen your savings plan.

VaR Risk Parameters
Enter your total portfolio value in USD
%
Use Annual Volatility
Number of days for VaR horizon calculation
95.0%
Statistical confidence range (90.0% – 99.9%)
Risk Assessment Summary
Z-Score (Normal Distribution) 1.645
Adjusted Volatility Over Horizon 2.00%
Maximum Potential Value at Risk (VaR)
$3,289.71
(3.29% of Portfolio)
Interpretation:

There is a 95.0% probability that your portfolio will not lose more than $3,289.71 over a 1-day time horizon under normal market conditions.

Frequently Asked Questions

Our Value at Risk Calculator delivers instant, precise VaR estimates. Know your downside risk and build a savings plan that protects your FIRE goals.

Q1. What is a Value at Risk Calculator?

A: A Value at Risk Calculator estimates the maximum dollar loss your portfolio might face over a set time horizon, at a chosen confidence level. It turns volatility and position size into one clear risk number. You see your downside before it happens.

Q2. How do you calculate Value at Risk?

A: VaR multiplies your position amount by volatility and a z-score tied to your confidence level. The formula scales volatility by the square root of your time horizon. This gives you a single dollar figure for potential loss.

Q3. How much can my portfolio lose using VaR?

A: VaR shows the loss you likely won't exceed, not your worst-case scenario. At a 95% confidence level, there's still a 5% chance losses run higher. Pair VaR with stress testing for a fuller risk picture.

Q4. How does the confidence level change my VaR result?

A: A higher confidence level raises your z-score, which pushes the VaR dollar amount up. Moving from 95% to 99% confidence widens your risk estimate. Tighter confidence means a more conservative number.

Q5. What's the difference between daily and annual volatility in VaR?

A: Daily volatility reflects short-term price swings; annual volatility measures yearly variation. Our calculator scales annual figures down to your chosen time horizon automatically. This keeps your VaR aligned with the right timeframe.

Q6. How many days should I use for my VaR time horizon?

A: Traders often use a 1-day horizon for active positions. Long-term investors and FIRE planners may prefer 10-day or monthly horizons. Match the horizon to how often you actually rebalance.

Q7. Is Value at Risk the same as standard deviation?

A: No. Standard deviation measures overall volatility; VaR converts that volatility into a specific dollar loss at a given confidence level. VaR answers a sharper question: how much money is actually at stake.

Q8. Why does Value at Risk matter for FIRE planning?

A: VaR shows the real dollar risk behind your portfolio, not just a percentage. Knowing your potential loss helps protect your safe withdrawal rate and your FIRE timeline. It turns abstract volatility into a number you can plan around.