Advanced

Portfolio Risk Management

Develop a professional framework for identifying, measuring and managing portfolio risk. Learn to protect capital, control drawdowns and build portfolios that remain resilient across changing market regimes.

14 hours 36 lessons

Course introduction video

You will learn to recognize the risks hidden beneath portfolio returns, measure exposure at both position and portfolio level, and allocate capital with greater discipline. By combining diversification, position sizing, scenario analysis and clear risk limits, you will build a repeatable process designed to preserve capital and improve long-term decision-making under uncertainty.

Course content

Module 1

Foundations of portfolio risk

Risk, uncertainty and permanent capital loss
Volatility versus fundamental risk
Systematic and idiosyncratic risk
Understanding risk tolerance and capacity
Return distributions and tail events
Time horizon and path dependency
Benchmark and tracking risk
Liquidity risk in stressed markets
Creating a portfolio risk policy

Module 2

Measuring portfolio exposure

Position weight and contribution to risk
Volatility and downside deviation
Correlation, covariance and diversification
Beta and market sensitivity
Value at Risk and its limitations
Maximum drawdown and recovery time
Sector, geography and currency exposure
Factor concentration and hidden bets
Building a practical risk dashboard

Module 3

Position sizing and portfolio design

Defining a portfolio risk budget
Equal weight and conviction weighting
Position sizing by downside risk
The Kelly criterion in practice
Concentration versus over-diversification
Managing correlated positions
Cash as a strategic allocation
Rebalancing rules and decision thresholds
Designing resilient portfolio structures

Module 4

Stress testing and risk control

Building bull, base and bear scenarios
Stress testing market and company shocks
Managing drawdowns without emotional decisions
Hedging tools and when to use them
Stop losses, thesis breaks and sell discipline
Monitoring liquidity and leverage
Responding to volatility regime changes
Running a structured portfolio review
Learning from risk-management failures

What you'll achieve

Identify and measure the main risks within a portfolio
Size positions according to conviction, downside and liquidity
Build diversified portfolios without diluting your best ideas
Respond to drawdowns and market shocks with a defined process