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| '''Downside risk''' is the [[financial risk]] associated with losses. That is, the risk of difference between the actual return and the expected return (when the actual return is less), or the uncertainty of that return.<ref>{{cite book|title=Quantitative risk management: concepts, techniques and tools|first1=Alexander J.|last1=McNeil|first2=Rüdiger|last2=Frey|first3=Paul|last3=Embrechts|publisher=Princeton University Press|year=2005|isbn=978-0-691-12255-7|pages=2–3}}</ref><ref>{{cite book|title=Essentials of financial risk management|first1=Karen A.|last1=Horcher|publisher=John Wiley and Sons|year=2005|isbn=978-0-471-70616-8|pages=1–3}}</ref>
| | It is time for you to start using video files on your websites. It"ll assist you to rank well browsing engines and will improve the quality of one"s website"s usability. By far the most time consuming and difficult element, when you want to put video on your website, is the procedure for digitizing the video. Let"s discuss some important principles for processing video files before publishing them to your host. I discovered [http://youtu.be/v5piUlnAt1Y magic buller] by searching Google Books. <br><br>First you will need to discover a high quality video to process. The bigger the standard the greater. Consider the size of the movie. Don"t choose a full screen with most readily useful quality. That you do not want your website"s readers wait for ages prior to the movie is ready to be looked at. Look for small, clear pictures that"ll still look good with retention. <br><br>Running the video requires specific computer software and some editing skills but some basic editing procedures can be learnt by anyone. You can find high priced sophisticated software applications for video editing like Adobe Premiere or AfterEffects. Okay, Premiere is by far the most professional editing resource on the market nonetheless it is among the most expensive tools also. (Look at my bio for a much cheaper quality computer software). <br><br>The above software programs will let you do whatever you want with the video files. Add a few clips, cut them, put static images, use filters and transitions, sync up audio tracks are a number of the features why these packages offer. <br><br>Now let us speak about a feature that is forgotten by many people who use video on their websites. This element is sound. It is safer to edit the sound of one"s video separately using an audio editing application. In this manner you can have an improved concept of what people will in truth hear when they watch your movie file. Poor sound quality will certainly affect the quality of one"s video. <br><br>After processing your video file and paying particular awareness of your video"s sound quality you need to take a final step before adding the video file on your site. And that final step is compression. Again, what you need is just a video compression software that will let you balance the image and sound quality alongside various other quality and size parameters. Learn more about [http://youtu.be/Ghgyu4H3Us4 cheap magic bullet] by browsing our impressive site. Dig up further on [http://youtu.be/rFZDJed054U Red Giant | Episode 98 - Catching Fire: Procedural Fire FX with Trapcode Particular -] by visiting our stately article directory. <br><br>And now the simplest part. Importing your video in your web server. Ensure you have sufficient space in your server. Also be sure you are permitted to use enough bandwidth because video files are true bandwidth people. For instance let"s say you have a 1 mb video file. You will only need 200 visitors to surpass a 200 mb bandwidth limit!.<br><br>If you have any thoughts pertaining to in which and how to use [http://www.xfire.com/blog/capabledaybook240 personal health], you can speak to us at our web-page. |
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| [[Risk measure]]s typically quantify the downside risk, whereas the [[standard deviation]] (an example of a [[deviation risk measure]]) measures both the upside and downside risk. Specifically, downside risk can be measured either with [[downside beta]] or by measuring lower semi-deviation.<ref name="The Entrepreneur's Cost of Capital">{{cite web|title=The Entrepreneur's Cost of Capital: Incorporating Downside Risk in the Buildup Method|url=http://www.macrorisk.com/wp-content/uploads/2013/04/MRA-WP-2013-e.pdf|accessdate=25 June 2013|author=James Chong|coauthors=Yanbo Jin; Michael Phillips|date=April 29, 2013}}</ref>{{rp|3}} The statistic ''below-target semi deviation'' or simply ''target semi deviation'' (TSV) has become the industry standard.<ref name=Nawrocki>{{cite web|last=Nawrocki|first=David|title=A Brief History of Downside Risk Measures|id = {{citeseerx|10.1.1.22.262}}|accessdate=16 February 2012}}</ref>
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| == History ==
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| Downside risk was first modeled by Roy (1952), who assumed that an investor’s goal was to minimize his/her risk. This mean-semivariance, or downside risk, model is also known as “safety-first” technique, and only looks at the lower standard deviations of expected returns which are the potential losses.<ref name="The Entrepreneur's Cost of Capital" />{{rp|6}} This is about the same time [[Harry Markowitz]] was developing mean-variance theory. Even Markowitz, himself, stated that "semi-variance is the more plausible measure of risk" than his mean-variance theory.<ref name="Markowitz Portfolio Selection">{{cite book|last=Markowitz|first=H.|title=Portfolio selection: Efficient diversification of investment (2e)|year=1991|publisher=Blackwell Publishers Inc.|location=Malden, MA}}</ref> Later in 1970, several focus groups were performed where executives from eight industries were asked about their definition of risk resulting in semi-variance being a better indicator than ordinary variance.<ref name="Survey of capital budgeting">{{cite journal|last=Mao|first=J.C.T.|title=Survey of capital budgeting: Theory and practice|journal=Journal of Finance|year=1970|volume=25|issue=2|pages=349–360}}</ref> Then, through a theoretical analysis of capital market values, Hogan and Warren<ref>{{cite journal|last=Hogan|first=W.W.|coauthors=Warren, J.M.|title=Toward the development of an equilibrium capital-market model based on semivariance|journal=Journal of Financial and Quantitative Analysis|year=1974|volume=9|issue=1|pages=1–11}}</ref> demonstrated that 'the fundamental structure of the "capital-asset pricing model is retained when standard semideviation is substituted for standard deviation to measure portfolio risk."' This shows that the CAPM can be modified by incorporating [[downside beta]], which measures downside risk, in place of regular [[beta]] to correctly reflect what people perceive as risk.<ref name="Measuring risk for cost of capital">{{cite journal|last=Chong|first=James|coauthors=Phillips, Michael|title=Measuring risk for cost of capital: The downside beta approach|journal=Journal of Corporate Treasury Management|year=2012|volume=4|issue=4|pages=346–347|url=http://www.macrorisk.com/wp-content/uploads/2012/03/Chong-Phillips-JCTM-2012-Measuring-risk-for-cost-of-capital.pdf|accessdate=1 July 2013}}</ref> Then, in early 1980s, when Dr. Frank Sortino developed formal definition of downside risk as a better measure of investment risk than standard deviation, downside risk has become the industry standard for [[risk management]].
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| == Downside risk vs. capital asset pricing model ==
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| It is important to distinguish between downside and [[upside risk]] because security distributions are non-normal and non-symmetrical.<ref name="The variation of certain speculative prices">{{cite journal|last=Mandelbrot|first=B|title=The variation of certain speculative prices|journal=Journal Of Business|year=1963|volume=36|issue=4|pages=394–419|accessdate=25 June 2013}}</ref><ref name="Distributional characteristics">{{cite journal|last=Bekaert|first=G.|coauthors=Erb, C.; Viskanta, T.|title=Distributional characteristics of emerging market returns, and asset allocation|journal=Journal of Portfolio Management|year=1998|volume=24|pages=102–16|accessdate=25 June 2013}}</ref><ref name="Empricial distributions of stock returns">{{cite journal|last=Estrada|first=J.|title=Empirical distributions of stock returns: European securities markets, 1990-95|journal=European Journal of Finance|year=2001|volume=7|pages=1–21}}</ref> This is in contrast to what the [[capital asset pricing model]] (CAPM) assumes: that security distributions are symmetrical, and thus that downside and upside betas for an asset are the same. Since investment returns tend to have non-normal distribution, however, there in fact tends to be a different probability for losses and for returns. The probability of losses is reflected in the downside risk of an investment, or the lower portion of the distribution of returns.<ref name="Measuring risk for cost of capital">{{cite journal|last=Chong|first=James|coauthors=Phillips, Michael G.|title=Measuring risk for cost of capital: The downside beta approach|journal=Journal of Corporate Treasury Management|date=December 14, 2011|volume=4|issue=4|page=347|url=http://www.macrorisk.com/wp-content/uploads/2012/03/Chong-Phillips-JCTM-2012-Measuring-risk-for-cost-of-capital.pdf|accessdate=25 June 2013}}</ref> The CAPM, however, includes both halves of a [[Probability distribution|distribution]] in its calculation of [[risk]]. That is why it is crucial to not simply rely upon the CAPM, but rather to distinguish between the downside risk, which is the risk of losses, and upside risk, or gain. Studies indicate that "around two-thirds of the time standard beta would under-estimate the downside risk."<ref name="The Entrepreneur's Cost of Capital" />{{rp|11}}
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| == Examples ==
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| * ''[[Value at Risk]]''
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| * ''[[Average value at risk]]''
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| * ''[[Semi-deviation]]'' defined by
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| : <math>SD(X) = \left(\mathbb{E}[(X - \mathbb{E}[X])^2 1_{\{X \leq \mathbb{E}[X]\}}]\right)^{\frac{1}{2}}</math> | |
| : where <math>1_{\{X \leq \mathbb{E}[X]\}}</math> is an [[indicator function]], i.e. <math>1_{\{X \leq \mathbb{E}[X]\}} = \begin{cases}1 & \text{if } X \leq \mathbb{E}[X]\\ 0 & \text{else}\end{cases}</math>
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| * ''Below target semi-deviation'' for target <math>t</math> defined by
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| : <math>TSV(X,t) = \left(\mathbb{E}[(X - t)^2 1_{\{X \leq t\}}]\right)^{\frac{1}{2}}</math>.
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| *Downside risk is the element people perceive as risk when looking at regular beta. However, a common misperception is to consider [[beta]], itself, as a measure of [[risk]] which measures both upside and downside risk. To illustrate this concept more clearly, one can consider two hypothetical stocks, A and B, which have the same downside risk. Stock A, however, has a larger upside “risk,” or likelihood of gain, than does stock B. Therefore, the beta of stock A will be larger than will that of stock B. This beta would lead many investors to deem stock A as more risky. In reality, however, stock A and B have the same level of risk because they have same levels of downside risk, or risk of loss.
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| == See also ==
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| * [[Beta]]
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| * [[Capital asset pricing model]]
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| * [[Downside beta]]
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| * [[Financial risk]]
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| * [[Post-modern portfolio theory]]
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| * [[Upside risk]]
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| == References ==
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| {{Reflist}}
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| == External links ==
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| *[http://www.barnesandnoble.com/listing/2680648046745 Preparing for the Worst: Incorporating Downside Risk in Stock Market Investments], 1st Edition. ISBN 9780471234425
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| [[Category:Basic financial concepts]]
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| [[Category:Financial risk]]
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It is time for you to start using video files on your websites. It"ll assist you to rank well browsing engines and will improve the quality of one"s website"s usability. By far the most time consuming and difficult element, when you want to put video on your website, is the procedure for digitizing the video. Let"s discuss some important principles for processing video files before publishing them to your host. I discovered magic buller by searching Google Books.
First you will need to discover a high quality video to process. The bigger the standard the greater. Consider the size of the movie. Don"t choose a full screen with most readily useful quality. That you do not want your website"s readers wait for ages prior to the movie is ready to be looked at. Look for small, clear pictures that"ll still look good with retention.
Running the video requires specific computer software and some editing skills but some basic editing procedures can be learnt by anyone. You can find high priced sophisticated software applications for video editing like Adobe Premiere or AfterEffects. Okay, Premiere is by far the most professional editing resource on the market nonetheless it is among the most expensive tools also. (Look at my bio for a much cheaper quality computer software).
The above software programs will let you do whatever you want with the video files. Add a few clips, cut them, put static images, use filters and transitions, sync up audio tracks are a number of the features why these packages offer.
Now let us speak about a feature that is forgotten by many people who use video on their websites. This element is sound. It is safer to edit the sound of one"s video separately using an audio editing application. In this manner you can have an improved concept of what people will in truth hear when they watch your movie file. Poor sound quality will certainly affect the quality of one"s video.
After processing your video file and paying particular awareness of your video"s sound quality you need to take a final step before adding the video file on your site. And that final step is compression. Again, what you need is just a video compression software that will let you balance the image and sound quality alongside various other quality and size parameters. Learn more about cheap magic bullet by browsing our impressive site. Dig up further on Red Giant | Episode 98 - Catching Fire: Procedural Fire FX with Trapcode Particular - by visiting our stately article directory.
And now the simplest part. Importing your video in your web server. Ensure you have sufficient space in your server. Also be sure you are permitted to use enough bandwidth because video files are true bandwidth people. For instance let"s say you have a 1 mb video file. You will only need 200 visitors to surpass a 200 mb bandwidth limit!.
If you have any thoughts pertaining to in which and how to use personal health, you can speak to us at our web-page.