{"id":14,"date":"2013-09-19T09:39:54","date_gmt":"2013-09-19T09:39:54","guid":{"rendered":"http:\/\/wealthmanagementrisk.net\/?p=14"},"modified":"2019-11-15T13:10:26","modified_gmt":"2019-11-15T18:10:26","slug":"why-sharpe-ratio-and-other-traditional-stats-cant-prepare-you-for-whats-coming","status":"publish","type":"post","link":"https:\/\/rixtrema.com\/blog\/why-sharpe-ratio-and-other-traditional-stats-cant-prepare-you-for-whats-coming\/","title":{"rendered":"Why Sharpe Ratio And Other Traditional Stats Can&#8217;t Prepare You For What&#8217;s Coming"},"content":{"rendered":"<p><span style=\"color: #000000;\">Are you thinking about interest rate risk and how it might interact with equity risk?<\/span><\/p>\n<p><span style=\"color: #000000;\">If you are using risk models, beware, they can be lying. We can improve the accuracy of the models by using portfolio stress testing, but we first must understand where their pitfalls lie. This post has a bit of a quant flavor to it, but the key point is very important for advisors as well. Traditional risk modeling and stress testing approaches are misleading when it comes to interest rate risk, they cannot help you prepare your clients for what&#8217;s coming.<\/span><\/p>\n<p><iframe loading=\"lazy\" title=\"Do Not Trust Risk Models!\" width=\"960\" height=\"540\" src=\"https:\/\/www.youtube.com\/embed\/ok1Cz2UIVFs?feature=oembed&#038;enablejsapi=1&#038;origin=https:\/\/rixtrema.com\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture\" allowfullscreen><\/iframe><\/p>\n<p><a href=\"https:\/\/rixtrema.net\/requestdemo\/?product=PCT&amp;source=blog\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-2368 size-full\" src=\"https:\/\/www.rixtrema.com\/blog\/wp-content\/uploads\/2018\/11\/PCT-1-2.png\" alt=\"\" width=\"800\" height=\"418\" srcset=\"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2018\/11\/PCT-1-2.png 800w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2018\/11\/PCT-1-2-300x157.png 300w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2018\/11\/PCT-1-2-768x401.png 768w\" sizes=\"auto, (max-width: 800px) 100vw, 800px\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Are you thinking about interest rate risk and how it might interact with equity risk? If you are using risk models, beware, they can be lying. We can improve the accuracy of the models by using portfolio stress testing, but we first must understand where their pitfalls lie. This post has a bit of a&#8230; <\/p>\n<div class=\"clear\"><\/div>\n<p><a href=\"https:\/\/rixtrema.com\/blog\/why-sharpe-ratio-and-other-traditional-stats-cant-prepare-you-for-whats-coming\/\" class=\"excerpt-read-more newsstand-button\">Read More<\/a><\/p>\n","protected":false},"author":3,"featured_media":2407,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[192,191,179],"tags":[19,20,21,25,26,29,31],"class_list":["post-14","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-risk-management","category-risk-tolerance","category-using-larkspur-rixtrema-tools","tag-inflation-risk","tag-interest-rate-rise","tag-interest-rate-risk","tag-portfolio-stress-testing","tag-risk-models","tag-share-ration","tag-tracking-error"],"jetpack_featured_media_url":"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2013\/09\/o-businessman-storm-facebook.jpg","yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v15.9.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Why Sharpe Ratio And Other Traditional Stats Can&#039;t Prepare You For What&#039;s Coming<\/title>\n<meta name=\"description\" content=\"Are you thinking about interest rate risk and how it might interact with equity risk?If you are using risk models, beware, they can be lying. We can improve the accuracy of the models by using portfolio stress testing, but we first must understand where their pitfalls lie. This post has a bit of a quant flavor to it, but the key point is very important for advisors as well.\" \/>\n<link rel=\"canonical\" href=\"https:\/\/rixtrema.com\/blog\/why-sharpe-ratio-and-other-traditional-stats-cant-prepare-you-for-whats-coming\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Why Sharpe Ratio And Other Traditional Stats Can&#039;t Prepare You For What&#039;s Coming\" \/>\n<meta property=\"og:description\" content=\"Are you thinking about interest rate risk and how it might interact with equity risk?If you are using risk models, beware, they can be lying. We can improve the accuracy of the models by using portfolio stress testing, but we first must understand where their pitfalls lie. 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