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Calculating the Risk to Net Value in a Portfolio

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The highlighted information on this page refers to functionality not yet generally available. It is available only in the Preview Sandbox environment.

In the Portfolio Optimizer, the Risk to Net Value indicator measures the Potential Risk value taking into account the Net Value provided by all projects displayed in the Portfolio Optimizer. 

For achieving the most efficiency within the portfolio, you want to see that the Risk indicator is low and the Net Value indicator is high. 

The Risk value and Net Value indicators are represented from the perspective of how they relate to each other.

  • The Risk indicator is calculated by the following formula:
    Risk value indicator = Risk / (Risk + Net Value)
  • The Net Value indicator is calculated by the following formulas:
    Net Value indicator = 1 - Risk / (Risk + Net Value)
    Or
    Net Value indicator = Net Value / (Risk + Net Value)

NOTE The Risk to Net Value indicator calculates based on the projects that you display in the Portfolio Optimizer, and not on all the projects which are associated with the portfolio. 

risk_to_net_value_indicator_new_optimizer.png

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Linked to Understanding the Portfolio Optimizer.

 

This article last updated on 2018-01-19 15:43:27 UTC