1. Traditional Risk Models Only Measure “Normal” Conditions
Conventional risk models calculate losses within predictable ranges, ignoring extreme “tail events.” They assume markets follow historical patterns, but crises like 2008 and 2020 proved this false. These models answer “What could go wrong under normal circumstances?” but fail when markets break from the norm.
2. The Real Threat Lies in Extreme Events
During market crashes, correlations between assets shift dramatically. Traditional risk models can’t account for this. RiXtrema’s analysis found the S&P 500 exceeded its 99% risk limits 22-41 times in 546 days during 2020 – proving their inability to handle real-world turbulence.
3. Relying on History Leaves You Vulnerable
Most risk models depend entirely on past data. But history doesn’t repeat perfectly. Our tests showed models calibrated before 2020 severely underestimated the pandemic’s market impact. It’s a reactive approach in a world that demands foresight.
4. StressTestAI: Proactive Risk for Unpredictable Markets
RiXtrema’s StressTestAI replaces outdated models with forward-looking scenario analysis. We simulate 1,000+ risk factors – from geopolitical shocks to economic collapses – so you see vulnerabilities before they become crises. No surprises. No false confidence.
5. See the Difference for Yourself
Watch as we expose the gaps in traditional risk models and demonstrate StressTestAI’s dynamic approach.
▶ Watch the Video: “VaR vs. StressTestAI – The Stress Test Showdown”
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