Abstract

This paper analyses a Skewed t Distribution approach to estimate Value at Risk (VaR) as a tool that can measure a risk investment. The method can estimate an investment risk that can overcome the shortcoming of classical VaR, which cannot capture the existence of fat tail and skewness. The application of the method was utilized to evaluate the individual risk of four stocks taken from the NYSE Index, namely Advance Micro Devices Inc (AMD), The Coca-Cola Company (KO), Pfizer Inc. (PFE), and Walmart Inc (WMT). It can be summarized from the result of the analysis that VaR (in several confidence levels) based on the distribution approach is powerful in risk measurement and can give an alternative to the investor for estimating the risk.

Details

Title
Measuring risk based on skewed t distribution approach
Author
Sulistianingsih, E 1 ; Rosadi, D 2 ; Abdurakhman 2 

 Department of Mathematics, Faculty of Mathematics and Natural Sciences, Universitas Gadjah Mada, Indonesia; Department of Mathematics, Faculty of Mathematics and Natural Sciences, Universitas Tanjungpura, Indonesia 
 Department of Mathematics, Faculty of Mathematics and Natural Sciences, Universitas Gadjah Mada, Indonesia 
Publication year
2021
Publication date
Jul 2021
Publisher
IOP Publishing
ISSN
17426588
e-ISSN
17426596
Source type
Scholarly Journal
Language of publication
English
ProQuest document ID
2553324364
Copyright
© 2021. This work is published under http://creativecommons.org/licenses/by/3.0/ (the “License”). Notwithstanding the ProQuest Terms and Conditions, you may use this content in accordance with the terms of the License.