Risk Engine: Overview
Learn How Our Risk Engine Works
Our risk engine offers financial institutions and software providers robust portfolio forecast and optimisation capabilities accessible via REST API. Our technology emphasises strategic asset allocation as the main driver of portfolio volatility and ultimately performance.
Simulation Module API
This module provides realistic wealth forecasts for portfolio KPI calculations and goal reachability calculations for financial planning purposes. The projections are done in thousands of capital market scenarios through advanced Monte Carlo simulations and include liquid and illiquid asset classes, liabilities, in- and outflows. Returns are multiperiod and non-normally distributed to account for capital market crises and even climate change or extreme events like COVID-19—going beyond simplified forecasts that often overlook these factors.
Optimisation Module API
This module optimises portfolios by considering risk budget, cash flows, financial goals, and more, using advanced algorithms that account for real-world market complexities and multi-goal requirements—going beyond simple one-period optimisation methods that often overlook these factors.
The preferred optimisation function can be selected in this module (see below).
There is also a high optimisation flexibility logic-wise: core-satellite solutions are supported as are pre-defined strategies like “balanced” or “capital gain”, or optimisations can search for the best individual strategic asset allocation, e.g., for UHNWIs with customised restrictions.
Use Cases
Open New Opportunities in Portfolio Risk Management and Optimisation
- Get portfolio risk metrics
- Create an input-light financial plan
- Assess and simulate downside risks realistically
- Create bespoke and optimised investment strategies for UHNWI
- Optimise portfolios without focus on single instruments
- Optimise for downside scenarios
- Conduct climate change simulations
- Create climate-robust asset allocations
