- RiskGrades - RG
- A trademarked method for calculating the risk of an asset portfolio. RiskGrades are based on a variance-covariance approach that measures the volatility of assets or asset portfolios as the scaled standard deviations of the returns.
More complex RiskGrades calculations allow for a few additional concepts:
RiskGrades were developed by JPMorgan. You can use RiskGrades to determine the level of risk in your portfolio based on the following numbers:
- The RG of a risk-free asset is expected to be 0
- The RG of a low-risk asset is expected to be 0 - 100
- Normal stocks/indexes should have an RG of 100 - 300
- Stocks with an RG of 100 - 800 are considered high risk
- IPOs have an RG greater than 800
Investment dictionary. Academic. 2012.