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risk factor monitoring analysis system


CriterionStar risk factor monitoring analysis system is a multi-factor risk volatility model .


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CriterionStar Risk Factor Monitoring and Analysis System


CriterionStar risk factor monitoring analysis system is a multi-factor risk volatility model , created by Secfortune, used to measure the overall risk associated with a security relative to the market, watching closely the volatility of indexes and equities, analyzing whether the volatility exceeds the margin of safety.


The CriterionStar Risk Factor Monitoring and Analysis System contains multiple data metrics, including transaction prices, stock trading volume, earnings growth and senior debt ratings. The model focuses on monitoring transaction prices and stock trading volumes, while monitoring the risk factors associated with the three main components: industry risk, different investment theme risks and company-specific risks.


A basic factor that investors and portfolio managers scrutinize when evaluating the markets or portfolios is investment risk. Identifying and measuring investment risk is one of the most important steps taken when deciding what assets to invest in.


This is because the level of risk taken determines the level of return that an asset or portfolio of assets will have at the end of a trading cycle. Eventualliy one of the most widely accepted financial principles is the tradeoff between risk and return.



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One method that a portfolio manager might use to measure investment risk is evaluating the impact of a series of broad factors on the performance of various assets or securities. Using a factor model, the return-generating process for a security is driven by the presence of the various common fundamental factors and the asset's unique sensitivities to each factor.


Since a few important factors can explain the risk and return expected on an investment to a large degree, factor models can be used to evaluate how much of a portfolio's return is attributable to each common factor exposure. Factor models can be broken down into single-factor and multiple-factor models. One multi-factor model that can be used to measure portfolio risk is the CriterionStar risk factor monitoring analysis system .


The CriterionStar risk factor monitoring analysis model contains many factors that can be used to predict and control risk. The multi-factor risk model uses many key fundamentals that represent investment characteristics.


Some of these factors include yield, profit growth, volatility, liquidity, momentum, price-earnings ratio, size, leverage, and growth; factors which are used to describe the risk or returns of a portfolio or asset by moving from quantitative, but unspecified, factors to readily identifiable fundamental characteristics.





The CriterionStar risk factor monitoring analysis model uses a single risk value number to measure the relative risk of a security. The risk value is represented by a number: a percentile between 0 and 100.



For all markets worldwide, 0 means the most stable and 100 means the most unstable.




indicates stable fluctuation, no risk, and safe investment stage





indicates that the volatility can withstand, low risk, and safe investment stage




indicates that the volatility begins to be unstable, the risk increases, and cautious investment stage




indicates that the volatility is too large, the risk is increasing sharply, the investment is easy to losing money, and the stage of using the hedging tools




indicates that the volatility is fierce, the market enters a high-risk state, the investment must be stopped, and the stage of use of the hedging tools




indicates that the market has entered or is about to enter a plunge phase




For example, an equity with a risk value of 65 is calculated as a sharp increase in risk, with excessive volatility, paying attention to investment losses, and considering the use of hedging tools.


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SECF has applied pioneering ideas to real-world investment trading. Our development of risk Mgt models then helped pave the way for many of the quantitative and risk management practices used industry-wide. Our Analytics research provides new understanding for investors on how markets, asset classes and individual securities are linked from a risk perspective.