# What is the 'StashAway Risk Index'?

You’ll see that your portfolio is qualified by the StashAway Risk Index. This is the measurement we use to determine how much risk our system should expose you to, which then determines your portfolio’s asset allocation. We gave it our own name not to be fancy, but because it’s a specific application of a fairly common risk metric, Value-at-Risk.

To calculate the potential loss of a portfolio in a year, we use Value-at-Risk (VaR). At StashAway, we use 99%-VaR, which can be interpreted as a portfolio having a 99% probability of not losing more than a given percentage of assets in a year.

Here’s an example: a StashAway portfolio with $100,000 and a StashAway Risk Index of 10% has a 99% probability of not losing more than 10%, or $10,000 in a year. In other words, there is 99% probability that your portfolio’s value won’t decrease below $90,000 if you select a 10% StashAway Risk Index.

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